How to Invest in US Stocks From India – A Complete Step-by-Step Guide

Delhi-based marketing professional Kajal spends her weekends enjoying lavish outings. Her guilty pleasure? Ordering a ₹500 biryani every Saturday night while binge-watching financial YouTube videos. 

One day, while reviewing her food delivery bill, she thought, "I spend ₹2,000 on food every weekend. What if I invested in this?"

Curious, she checks the stock market and sees that if she had invested $100 (₹8,700) in Apple five years ago, it would be worth around $350 (₹30,450) today. That thought hits her hard. “Agar iPhone le sakti hoon, toh Apple ke shares kyun nahi?”

After making up her mind, she looked into investment possibilities for Indian citizens in US stocks. She found out she could purchase fractional shares of global companies, including Tesla and Microsoft, at $1 (₹87). 

She immediately transferred $500 (₹43,500) under RBI’s LRS limit and purchased her first US stocks.

What Kajal learns:

• You can begin with just $1 (₹87)—most brokers support fractional share buying.
• The RBI provides up to $250,000 (₹2.17 crore) annually in the Liberalised Remittance Scheme (LRS) for foreign investment.

• US stock gains are taxed in India and the US— The US deducts a 25% tax on dividends, but only India taxes capital gains under the 

  
  Double Taxation Avoidance Agreement (DTAA).

While Nifty remained stagnant after a couple of months, her US stocks increased by 12%. Rather than spending indiscriminately, 

Kajal subsidises her lifestyle—some biryani here, some investments there. Her weekend itinerary now involves monitoring the Nasdaq and S&P 500 and her food cravings.

"Starbucks ka coffee chhodega toh Tesla ka stock bhi lega!”

Wall Street Pe Investing: Is It A Masterstroke?

Some of the world's most widely recognised brands operate within the US stock market. Here’s why it’s a smart move:

1. Diversification: Investors who distribute their funds across multiple economic zones minimise risk exposure and achieve better financial stability.

• Kajal understood that investing all her money in Indian stocks would restrict her financial growth potential. Therefore, she decided to invest 20% of her funds in US stocks, which improved her risk management strategy.
   

2.    High-Growth Companies: Tesla, Nvidia, and Amazon's stock performance has produced substantial exponential growth over the years.

• Kajal purchased Tesla stock worth $500, which amounted to ₹43,500 when each share was available at $200.

6 months later:

• The stock value of Tesla reached $250 per share.
• Kajal’s $500 turned into $625 (₹54,375).

3.  Stronger Currency: The USD has increased in value against the INR by 50% over the last 20 years, increasing the dollar investment's long-term worth.

• By investing in the US, Kajal took advantage of the exchange rate fluctuation.

• Impact of USD Appreciation on Kajal’s Investment
   

4.   Global Exposure: When you invest in US companies, you gain worldwide market entry, which enables you to capitalise on international economic growth opportunities.

• Kajal decided to invest in US brands because she was already buying products from companies such as Apple, Netflix, and Starbucks.

Her approach:

• She purchased two Apple shares, which cost $340 (₹29,580) at $170 per share.
• The share price for Apple rose to $190 in just a few months.
• Her investment grew to $380 (₹33,060).

Every time she buys an iPhone or a Netflix subscription, she feels good knowing she’s also making money from these brands!

Paisa Legal Hai Ya Illegal?: The RBI Rulebook Decoded!

Yes! All Indians have access to foreign investment opportunities under the Reserve Bank of India (RBI) 's Liberalised Remittance Scheme (lRS), which enables them to purchase US stocks and other foreign assets.

Key RBI Rules Under LRS:

• Through the Liberalised Remittance Scheme, Indians can legally invest in foreign stocks, bonds, or properties up to a maximum yearly limit of $250,000 (₹2.17 crore).

   

• US stocks, alongside ETFs and international startup opportunities, are accessible through this system.

   

• According to RBI rules, foreign transfers must occur via banks and forex services, while UPI payments remain unauthorised for international transfers.

   

• Any amount exceeding ₹7,00,000 requires a 5% Tax Collected at Source (TCS) deduction from the transaction.

How TCS Affects Kajal’s Investment?

For that specific financial year, Kajal invested in US stocks worth ₹10,00,000. Since ₹7,00,000 qualifies for tax exemption, the additional ₹3,00,000 requires 5% Tax Collected at Source (TCS).

The Ultimate Step-By-Step Guide To Invest: No More Jugaad!

Do you want to begin stock investments in the US market? Follow these 5 simple steps:
 

The Dalal Street vs. Wall Street Face-Off!: Where To Invest?

1. US Stock Market (Wall Street)

• Apple, Amazon, and Tesla maintain their headquarters in this location.

   

• The returns are in dollars, which provides a benefit from the declining value of the INR against the dollar.

   

• The market enables investors to access worldwide business sectors that surpass India's boundaries.

   

• Investors need to consider both Transfer Pricing Surcharge deduction and Indian Capital Gains Tax in their calculation of taxes.

2.     Indian Stock Market (D-Street)

• India maintains a rapidly expanding economic situation, which fuels the development of high-growth fintech industries and manufacturing businesses.

   

• More straightforward taxation for Indian investors with fewer compliance hassles.

   

• The market demonstrates high volatility yet delivers superior possible returns within specified sectors.

   

• Investors experience easier investment processes because of direct access to stocks on the market.

How Kajal Balanced Her Portfolio?

Kajal allocated ₹5,00,000 between Indian and American markets through diversified investments. Her investment produced the following results:

Investment Breakdown:

• ₹3,00,000 in Indian Stocks: She invested her funds in three fast-growing sectors, which include IT businesses, banking institutions, and electric vehicle companies.
• ₹2,00,000 in US Stocks: Bought shares of companies like Apple, Microsoft, and Tesla.

Returns After 1 Year
 

Best Platforms To Invest Like A Pro

Finding the best broking platform becomes essential for Indian investors who wish to buy US stocks. These represent the best platforms currently available for investment in US stocks from India.

1. Vested Finance

    

• Features: The broking service provides commission-free investment, fractional share trading, and effortless fund transfer options.
• Best For: Beginner investors seeking an affordable platform featuring an easy-to-use interface will find the best solution here.

2.    INDmoney

• Features: No broking fees, portfolio tracking, and AI-driven advisory services.
• Best For: The target group includes investors seeking advanced financial planning features while investing.

3.   Zerodha (via Stockal)

• Features: Indian investors can access US stocks through Stockal's platform as part of a reliable broking service.
• Best For: Current Zerodha users who want to access United States market opportunities.

4.   Groww

• Features: The platform's intuitive design makes it easy for users to get started and enables direct purchases of US stocks instantly.
• Best For: The platform serves investors who use mobile investing applications while favouring simple design interfaces.

How Did Kajal Choose The Right Platform?

While considering these points, Kajal planned to invest ₹2,00,000 into US stock market opportunities.
 

Kajal selected Vested Finance because the platform offers free broking with fractional share purchases, which allows her to invest in pricey stocks such as Tesla and Amazon.

Hidden Charges That Can Eat Your Returns: Paisa Bachao!

Investing in US stocks requires strategic decisions for share selection as well as cost management practices. Several expenses can lower the value of your investment returns, as follows:
 

Total Savings Kajal Achieved:

Selecting a suitable platform combined with proper planning helped Kajal avoid ₹10,587 in excess expenses, thereby increasing the value of her actual returns.

Taxation Rules You Cannot Avoid!: Uncle Sam Ki Chaal

1. Dividend Tax (US): 25% tax is deducted at source.

    

• Example: Kajal receives dividends worth $200 (₹17,400), yet taxation deductions of $50 (₹4,350) result in her retaining $150 (₹13,050).
• Solution: She should claim the DTAA benefits to eliminate the Indian tax burden.

2.  Capital Gains Tax (India)

Short-term (less than 24 months): Taxed as per income slab.

Long-term (more than 24 months): 12.5% tax (no indexation)

• Example: Kajal sells Tesla stock after keeping it for 2.5 years, generating a total profit of ₹1,00,000. She pays ₹12,500 (12.5%) as tax.
• Solution: You must keep stocks active for at least two years because it leads to reduced taxation rates.

3.   Tax Credits (DTAA Benefit): India’s DTAA with the US prevents double taxation.

• Example: Kajal paid ₹4,350 in US tax; if her Indian liability is ₹5,000, she only pays ₹650 extra in India.
• Solution: Taxpayers can utilise the relief provided by DTAA through their annual tax return statement.

Dollar vs. Rupee: Forex Ka Khel Samjho!
 

Debt Consolidation: “Debt Ka Timepass Band Karo And Invest Wisely!”

A debt consolidation loan is a loan taken out to pay off multiple debts and liabilities. 

It enables the customers to combine all their debt obligations into a new single loan and repay the loan quickly and comfortably at a lower interest rate.

Why Is It Important?

High-interest loans can quickly drain wealth, making investing pointless if debts pile up.

Example: 

Kajal has a credit card loan at 36% interest and a personal loan at 14%. Even if her US stock portfolio grows 10% to 12% annually, her debt erodes any gains.
 

kajal consolidates both into a single secured loan at 10% interest:
 

Money Saved by Kajal
 

• Before consolidation: ₹64,000 in interest per year
• After consolidation: ₹30,000 in interest per year
• Total savings: ₹34,000 annually
   

Conclusion

Kajal’s journey into US stock investing transformed her financial mindset. From spending ₹2,000 every weekend on food to making calculated investments in global brands, she learned the power of compounding, diversification, and currency appreciation.

By leveraging fractional shares, RBI’s LRS, and DTAA benefits, she built a balanced portfolio across Indian and US markets while optimising her tax liabilities.

Now, whenever she purchases an Apple device or streams Netflix, she smiles—because she's a consumer and an investor!

FAQs

• Can I invest in US stocks from India without a broker?

No, you require a registered brokerage platform to invest in US stocks.

• Do I have to make a minimum investment?

Several platforms support fractional investing, so you can invest as little as $1.

• How long does it take to withdraw funds from a US brokerage account?

Usually, 3-5 business days, depending on the platform and bank processing times.

• What if I fail to report my US stock investments in ITR?

Non-reporting may result in penalties under the Income Tax Act.

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LoansJagat Team

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