Buying US Stocks from India: What You Actually Keep

Put ₹12 lakh into the S&P 500 on 26 September 2016, hold it until 18 September 2026, and the index alone turns it into about ₹61.6 lakh. That is the number the apps show you. The number you actually keep under today's rules, before any surcharge, is closer to ₹54.0 lakh (an illustration, not a tax assessment), and nearly two-fifths of the rupee gain came from the rupee falling, not from American companies doing anything at all.

Most guides list platforms and restate the US$250,000 LRS limit; two of the four top-ranked ones (checked 25 September 2026) still quote the TCS rules from before 2023. This one does the arithmetic in between: the TCS that comes back and the dividend tax that sometimes doesn't, the 24-month line, the estate tax almost nobody mentions, and a paperwork window that closes on 31 December 2026. Then something no tax guide can cover, because it comes from the earnings calls: what US companies are telling their own shareholders about India.

A candid note first. Inve reads US earnings calls for a living, and until we counted, we treated a US stock as simply American. Of the 6,113 US call summaries we hold from January 2025 to 10 September 2026, 502 mention India, from 293 of 3,158 companies. (The search matched "India", "India's" or "Indian"; we dropped five calls whose only match was a proper name such as Indian River or Indian Motorcycle. It counts calls that mention the country, not revenue exposure.) For some of them India is the growth plan. That surprised us more than any tax rule.

The route itself takes one paragraph

Under the RBI's Liberalised Remittance Scheme a resident individual can send up to US$250,000 abroad per financial year, April to March, and must quote a PAN on every LRS transaction (RBI LRS FAQ). You use it through an Indian app that opens a US brokerage account for you, or through an international broker directly. Either way rupees leave as dollars, you sign a Form W-8BEN so the US treats you as a treaty resident of India, and you buy. That part is easy. The expensive parts are the ones the sign-up screen skips.

What leaves the country with your money

TCS. From 1 April 2026, TCS on LRS remittances sits in section 394(1) of the Income-tax Act, 2025. The first ₹10 lakh you remit in a financial year, counted across all your LRS remittances, attracts none. Above that, money sent for anything other than education or medical treatment, investing included, is collected at 20%. The Finance Act 2026 cut the education and medical rate to 2% and left the investment rate at 20% (Budget 2026 memorandum, "Rationalisation of TCS rates"). TCS is not a tax on the investment. It is an advance against your income tax: you claim it in your return, and it comes back as a lower tax bill or a refund. It is still real money out of your account in the meantime. Remit in April 2026 and file in July 2027, and that is fifteen months before the claim is even made; a refund can take longer to process.

The currency spread. Your bank or app converts at its own rate, not the reference rate. No single published spread applies to everyone, so the example below assumes 1% each way; check yours by comparing the rate you got with the FBIL reference rate for that day.

The worked example: ₹12 lakh, ten years

Assumptions, so you can change them: a resident remits ₹12 lakh in one financial year into an S&P 500 index position on 26 September 2016 and sells on 18 September 2026. Index levels are the S&P 500 price index (FRED series SP500): 2,146.10 and 7,650.50. Exchange rates are the Federal Reserve's noon buying rates (FRED series DEXINUS): ₹66.56 and ₹95.87 per dollar. Dividends are handled in the next section. Today's rules apply throughout, although TCS at 20% did not exist in 2016. The investor's basic exemption is assumed to be used up by other income, which also means total income passes ₹50 lakh in the sale year and the surcharge applies (see below); the table stops before it. This is an economic illustration using market rates on the two trade dates, not a tax assessment: the statutory conversion rules (Rule 206 of the Income-tax Rules, 2026 sets an SBI telegraphic transfer buying rate for capital-gains income) and the deductible costs will give a different filed figure.

Without spreads or tax the position would be worth ₹61,61,558, 17.8% a year in rupees. After the leaks it is 16.3% a year, 4.5 times the money. The spreads cost about ₹1.2 lakh in end-value terms, ₹61,006 for each conversion: the entry fee is smaller in rupees on the day, but it forgoes ten years of compounding. Tax before surcharge cost ₹6.4 lakh. Assume modest other income, say ₹4 lakh, just enough to use the basic exemption: the sale year's total income is then about ₹53 lakh, inside the ₹50 lakh–₹1 crore band, so a 10% surcharge applies on top. On this gain's tax alone that is ₹63,862 more, and at that level marginal relief does not cap it. Larger other income changes the answer: above ₹1 crore of total income the surcharge rate is 15%.

Now the currency. Over those ten years the rupee went from ₹66.56 to ₹95.87 per dollar: the dollar gained 44.0% against the rupee, or 3.7% a year. The index delivered 13.6% a year in dollars; the rupee's slide is what lifted that to 17.8% a year in rupees. And India computes the gain in rupees, not dollars. In this economic illustration about ₹18.65 lakh of the ₹49.1 lakh rupee gain is the exchange rate alone ($63,634 × (95.87 − 66.56)): return no company earned, sitting inside the gain that gets taxed. The filed figure will differ with the statutory conversion rules; the point is that a falling rupee enlarges the rupee gain. Shorter windows point the same way: from ₹73.64 on 17 September 2021 (30.2% in five years) and from ₹88.17 on 18 September 2025 (8.7% in one).

Dividends: the 25% that can become 56%

The US–India treaty caps US tax on an individual's dividends at 25% of the gross amount, including dividends from US-listed ETFs (Article 10(2)(b), treaty text; IRS Table 1). Without a valid W-8BEN the broker withholds the statutory 30%. India then taxes the dividend at your slab rate and gives a credit for the US tax, but only up to the Indian tax on that same income (Article 25(2)(a)).

Take US$1,000 of dividends received in tax year 2026-27, converted at ₹95.87, so ₹95,870:

For a top-slab investor who does the paperwork, a US dividend costs the same 31.2% as an Indian one. Below the 25% slab the excess US tax is simply gone: a 10%-slab investor pays 25% on a US dividend and 10.4% on an Indian one, and no filing recovers the difference. The credit is also conditional on a form. For foreign income up to 31 March 2026 it is Form 67 under Rule 128, and in the portal's own words "the credit shall be allowed only if the assessee furnishes the required particulars in Form 67 within the specified timelines" (Form 67 user manual). For income from tax year 2026-27 it is Form 44 under Rule 76 of the Income-tax Rules, 2026, which must be verified by a chartered accountant where the foreign tax paid outside India for the tax year is ₹1 lakh or more. Timing matters too: the FAQs require Form 44 within twelve months from the end of the tax year, tie the credit to the return being filed within its own time limits, and set a separate deadline where the claim comes through an updated return (Form 44/45 FAQs, questions 4 and 9).

The 24-month line and the missing ₹1.25 lakh

Two of the Indian rules for listed shares don't travel. The 12-month holding period applies only to a security "listed in a recognized stock exchange in India" (Notes on Clauses, Finance (No. 2) Bill, 2024). A NYSE or Nasdaq share is long-term only after 24 months. Sell Apple after 18 months and the gain is taxed at your slab rate, up to 31.2% with cess before any surcharge, where the same holding in an NSE stock would pay 12.5%. After 24 months the rate is 12.5% without indexation (Budget 2024 memorandum), and the special ₹1.25 lakh annual exemption belongs to STT-paid Indian shares and funds. A US gain gets only what is left of your basic exemption, if other income has not already used it. The US, for its part, does not tax the capital gain at all unless you spend 183 days or more there in the year (IRS).

This is general information, not advice on your return. For your own position, check with a qualified tax adviser in India.

Schedule FA, the ₹20 lakh line, and a window that closes on 31 December

If you are resident and ordinarily resident (ROR), every US share you hold goes into Schedule FA, which means ITR-2 or ITR-3, never ITR-1; a resident but not ordinarily resident (RNOR) is outside the schedule (ITR-2 user manual). The schedule runs on the calendar year: the return for AY 2026-27 reports holdings at any time during the year ending 31 December 2025, with initial, peak and closing values converted at SBI's telegraphic transfer buying rate (e-filing portal guide to Schedules FA, FSI and TR). Leaving it out risks a ₹10 lakh penalty under sections 42 and 43 of the Black Money Act, which since 1 October 2024 does not apply where foreign assets other than immovable property total ₹20 lakh or less (Budget 2024 memorandum). The ₹20 lakh is a penalty threshold, not a reporting one. The position in the example above crossed it years before the sale.

If you have held US shares and never filled the schedule, a one-time scheme may cover you. The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, enacted in the Finance Act, 2026, opened on 16 August 2026 and takes declarations until 31 December 2026 (CBDT FAST-DS FAQs; All India Radio, 16 August 2026). Its second category is the LRS investor's usual mistake: assets bought from income already taxed in India but left out of the schedule, up to ₹5 crore in aggregate, settled with a flat fee of ₹1 lakh and immunity under the Black Money Act. The first category covers undisclosed foreign assets and income up to ₹1 crore in aggregate, at 30% tax plus an equal additional amount. Assets are valued as at 31 March 2026, and eligibility is conditional: residency in the relevant year, and exclusions for cases involving prosecution or proceeds of crime. Read the FAQs before assuming you qualify.

The tax almost nobody quotes: US estate tax

India levies no estate duty. The US does, and it applies to non-residents on US-situated assets, which explicitly include "stock of corporations organized in or under U.S. law, even if the nonresident held the certificates abroad" (IRS). An estate return is due when those assets exceed US$60,000 at death. The non-resident's credit is $13,000 (Form 706-NA instructions), which exempts roughly the first $60,000, and the rate schedule climbs to 40% (Form 706 instructions, Table A). India is not on the IRS list of estate tax treaty countries (IRS), so no treaty reduces it. The table assumes no deductible estate expenses and no prior US gifts.

The worked example's position, $63,634 on the day before the sale, is just over the line. The tax on it would be small, $945. The bigger cost is time. The IRS issues a transfer certificate only once it is satisfied the estate's tax "has been fully discharged or provided for", and for estates below the filing threshold it puts processing at "12 to 18 months" (IRS). Families tend to learn this after the death, not before.

What US companies are telling their shareholders about India

Many Indians buy US stocks to own something that doesn't depend on India. The calls say a surprising number of US companies do, and the ones that depend on it most are rarely the famous ones. In Inve's summaries of Microsoft, Nvidia and Broadcom calls since January 2025, seventeen calls in all, India does not appear once. Alphabet mentions it in one call summary of seven. Meanwhile an engine maker, a credit bureau and a lab-equipment maker put India into their own numbers. What follows is quoted from the calls, as of the September 2026 data.

Apple is the exception among the giants: India appears in all seven of its call summaries in the period. On 1 May 2025 management told analysts, "For the June quarter, we do expect the majority of iPhones sold in the U.S. will have India as their country of origin," and on the next call confirmed that "the majority, I should say, have a country of origin of India." On 30 April 2026 Tim Cook described the demand side: "It's the second largest smartphone market in the world and the third largest PC market. And despite doing extremely well there for quite some time, we still have a modest share." An Apple share is now partly a bet on Indian factories and Indian buyers.

Cummins guides India as a line of its own. In February 2026 it guided India revenue, joint ventures included, down 5% for the year. On 5 May 2026 chief executive Jennifer Rumsey said: "In India, we now project total revenue, including joint ventures, to increase 2% in 2026, up from our prior guide of 5% decline." The truck-demand guide rose with it, "supported by tax rate reductions", most plausibly the GST cut on lorries from 28% to 18% from 22 September 2025 (PIB). On 4 August 2026 she held the 2% guide. If that reading is right, a tax decision in New Delhi plausibly fed into the outlook of an NYSE-listed engine maker whose India revenue guide moved seven points in three months; Cummins did not say how much of the revision it explains.

TransUnion owns the majority of TransUnion CIBIL (since 2014), the bureau behind the CIBIL score most Indian borrowers know. On its fourth-quarter 2024 call it said, "Our guidance assumes roughly 10% growth in India in 2025 with a much stronger trajectory exiting the year." A year later: "Turning to India. Revenue declined 4% in the quarter and grew 2% for the year." By the second quarter of 2026 it reported "Revenue accelerated to 8% growth, slightly ahead of our expectations." Own it and you own a piece of the Indian retail-credit cycle.

Waters, which makes the chromatography instruments Indian generic drugmakers test with, said on 12 February 2025: "India is now a meaningful contributor to Waters at over 8% of our total sales." On the same call: "India Q4 was 34% constant currency growth, and for the year, 27%."

Jabil raised its networking forecast on 18 March 2026. Chief executive Michael Dastoor: "we now anticipate revenue will be approximately $400 million higher for the year coming in at $3.1 billion, reflecting stronger demand and exceptional execution across our advanced AI networking programs in India." American AI networking gear is being built in India.

Cognizant may come to you. On 29 April 2026 it said it continues "to make progress and advance on our evaluation of potential primary offering and secondary listing in India", and on 29 July: "We will make a decision on this once we have visibility of the revised regulatory framework."

The lesson is not to avoid these companies or to prefer them. It is that a US listing is not a non-Indian exposure. If your US money is meant to hold something that does not rise and fall with Indian demand, Indian credit or Indian tax policy, read the guidance before you buy. Cummins and TransUnion will tell you plainly how much India is in their year.

How Inve helps an Indian investor research a US company

Everything quoted above comes from Inve's analysed US calls. The call briefs and company pages are public, no account needed. Each covered company in the A–Z of US stocks has a stock page with its analysed earnings calls: every forward target with the speaker and the verbatim quote, the analyst Q&A with each answer marked direct, partial, deflected or refused, the risks management named, and a watchlist of what to check next quarter. The Cognizant listing line came from that watchlist, not from any headline.

Behind the briefs sits the Guidance Tracker, which records 38,764 targets across 899 US companies in the September 2026 data, each with its original wording, the quarter it was made and what became of it. It is part of US Pro, which is available only to accounts registered with a non-Indian phone number; an account created with a +91 number is an India account, so most readers of this guide will work from the public call briefs. The US earnings calendar shows when the next call lands, which is when Cummins' India number gets held or changed. New to calls? Start with how to read an earnings call transcript, then track guidance across quarters.

Where this can mislead you

The worked example uses one ten-year window in which US stocks did unusually well and the rupee fell steadily. A different decade gives different numbers. The example also leaves out dividends, flat bank charges and the interest lost while TCS sits with the government, and it converts at the Federal Reserve's rate on the two trade dates rather than by the statutory conversion rules. The tax rows assume the new regime and today's law throughout, stop before surcharge, and are not a tax assessment. The 2024 and 2026 budgets both changed rules this guide relies on, and the next one may too.

On the call data: the counts come from a text search of Inve's summaries, not full transcripts, so a passing mention of India can miss the summary. Seventeen summaries without India at Microsoft, Nvidia and Broadcom show only that India did not surface in those summaries; it says nothing about their Indian revenue, and a full transcript may still mention it. And the record is about two years deep: enough to show what a management says about India now, not whether it will be right.

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