Definition
US Stocks from India (LRS)
Indian residents can invest in US and other foreign stocks by remitting money abroad under the RBI's Liberalised Remittance Scheme, subject to its annual limit and tax rules.
Under the Liberalised Remittance Scheme (LRS), a resident individual can remit up to a specified annual limit abroad for permitted purposes, including buying foreign shares. Platforms and brokers facilitate access to US stocks, ETFs and fractional shares.
Remittances under LRS can attract TCS (tax collected at source) above certain thresholds, which is adjustable against your tax liability. Foreign investments also bring currency risk (rupee-dollar movements) and require reporting of foreign assets in your Indian tax return.
Gains on foreign shares are taxable in India, with holding-period rules determining the nature of capital gains. Investors should understand LRS limits, TCS, currency risk and disclosure obligations before investing abroad.
Related terms
- Fractional OwnershipFractional ownership lets multiple investors collectively own a share of a high-value asset, such as commercial property, splitting cost, income and risk among them.
- Robo-AdvisoryRobo-advisory is automated, algorithm-driven investment advice and portfolio management delivered online, typically recommending and managing low-cost diversified portfolios based on your profile.
- Direct IndexingDirect indexing means owning the individual stocks that make up an index in your own account, rather than buying an index fund or ETF, allowing customisation and tax management.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.