Many Indian investors want to add stocks of other stock markets of the world to strengthen their portfolio. When India’s stock market declines, many times America’s market performs well. In such a situation, if you have invested money in big American companies like Apple, Microsoft, then your total investment can be balanced. This is the reason that the trend of investment in foreign stocks is now increasing rapidly in India.
How to invest in Microsoft’s Stocks?
If you want to buy shares of companies like Apple or Microsoft, then first you have to open an account on a brokerage platform that allows Indians to invest in stocks in America. Some platforms like Zerodha (via vested), Indmoney, Groww (Us Stocks) are popular in India.
After opening an account in these platforms, you can send money from your bank to America under LRS. Once sending money, you can buy stocks like Apple, Microsoft in the stock market there. These shares will remain in your American brokerage account, and you can track their performance from your mobile app or website.
LRS Scheme: Legal permission to send money abroad
The Reserve Bank of India (RBI) has given the facility of “Liberalized Remedy Scheme” for Indian citizens. Under this, you can send abroad up to 2.5 lakh dollars (about 2 crore rupees) in a financial year. You can send this money for works like studies, travel or foreign investment. If you want to invest with the help of your family members, then there will be a separate limit of 2.5 million dollars for every member.
What is the rule of tax?
Taxes have to be paid in India on earnings from foreign stocks. If you sell the shares before two years, then you will have to pay short term capital gains tax. At the same time, after keeping more than two years, the stocks sold will be levied capital gains tax. This tax will be fixed by adding to your total income.
If you get dividend from companies like Apple or Microsoft, then the US already deducts 25% tax on it. But the good thing is that there is an agreement between India and America to avoid double taxation (DTAA). This means that the tax which is deducted in America, you can adjust while filing ITR in India.