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How taxation works in

US stocks?

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Profits when you sell at a higher price than your purchase price

What is taxed?

Dividends (if any)

TCS and GST on forex transactions

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You will need to pay taxes as per your tax slab.

Tax on Profits

The tax rate here will be 20% of profit.

If sold <24 months

If sold >24 months

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TCS is collected when you send money abroad like shopping, stocks etc

Tax Collected at Source

Tax can be claimed back as

Income tax refund or Tax credit while filing your ITR on computing your advance taxes.

Now: 5% for remittances exceeding ₹7 lakh. 

From July 1st 2023 : 20% of remittances

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Minimum GST amount on any transaction is ₹45.

Upto 1 Lakh

₹45 or 0.18% of amount whichever is higher

GST on Forex transactions

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Dividends

If you receive any dividend from the stock, Default rate of 25% of the amount will be deducted by the US stock broker.

This can be claimed back during your ITR filing in India

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Tax tips

If your taxation slab is 10% or less. You can save more taxes by selling before 24 months.

Both TCS and dividends can be claimed during ITR filing.

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