Investing in U.S. Stocks and Tax Implications in India

• Introduced in 2004, LRS allows up to $2,50,000 per year for permissible transactions.

• Tax Collected at Source applies if total foreign remittance exceeds ₹10 lakh.

• Dividends from U.S. stocks are treated as foreign income, subject to 25% U.S. withholding tax.

• India-U.S. Double Taxation Avoidance Agreement allows offset of U.S. withheld dividend tax against Indian tax liability.

• U.S. does not levy capital gains tax for Indian residents investing in U.S. stocks.

• Non-disclosure of foreign assets attracts ₹10 lakh penalty per year.