Investing in US stocks can be rewarding, but many Indian investors face challenges when considering repatriating funds. Understanding the repatriation process is crucial for ensuring that your profits are transferred efficiently and in compliance with regulations.
If you’re investing in US stocks from India, following a clear, compliant process is crucial for hassle-free fund transfers.
Step 1: Sell Your US Stocks
- Log into your US brokerage account.
- Sell the shares you wish to convert into INR.
- Confirm that the sale settles, usually within T+2 days (trade date + 2 business days).
Example: Riya sells 50 shares of Apple at USD 150 per share. After 2 business days, the proceeds (USD 7,500) are available in her brokerage account.
Step 2: Convert USD to INR
- Most brokers allow you to link an Indian bank account for international wire transfers.
- Check conversion rates offered by the brokerage or your bank — some platforms provide competitive rates compared to traditional banks.
Tip: Timing the transfer appropriately can help you take advantage of favorable USD-INR exchange rates.
Step 3: Understand Tax Implications
Before repatriating funds, consider taxes:
- US Taxes:
- Capital Gains Tax on profits from stock sales.
- Withholding Tax on dividends, if applicable.
- Indian Taxes:
- Long-term capital gains (LTCG) or short-term capital gains (STCG) rules apply depending on the holding period.
- You may be eligible to claim a foreign tax credit for taxes already paid in the US to reduce the impact of double taxation.
For detailed guidance, see Tax on US Stocks in India.
Step 4: Initiate an RBI-Compliant Transfer
All fund repatriation from US brokerage accounts must comply with RBI regulations under the Liberalised Remittance Scheme (LRS).
- Ensure that your total annual remittance under LRS does not exceed the limit of USD 250,000 per financial year.
- Use your bank’s wire transfer facility or broker-assisted remittance option.
Example: Riya transfers USD 5,000 from her US account to her Indian bank account, staying well within her annual LRS limit.
Step 5: Keep Documentation
- Maintain records of stock sale confirmations, tax deductions, and wire transfer receipts.
- These documents are required for Indian income tax filings and as proof of compliance with FEMA regulations.
Pro Tip: Digital copies of statements and receipts can simplify end-of-year tax reporting.
Step 6: Monitor the Funds Arrival
- Depending on the method, funds can take 1–5 business days to arrive in India.
- Verify that the credited amount matches your expectations after conversion and applicable bank fees.
Step 7: Reinvest or Plan Your Funds
Once repatriated, decide whether to:
- Reinvest in Indian equities or mutual funds.
- Keep cash in your bank account.
- Use for other personal or business purposes.
Proper planning ensures that your investment strategy remains aligned even after your profits are repatriated.
Key Takeaways
- Selling US stocks and repatriating funds is straightforward if you follow RBI and tax guidelines.
- Keep an eye on currency conversion rates and bank fees.
- Maintain all transaction records for smooth tax filing.
- Ensure transfers comply with your annual LRS limit.
By following these steps, repatriating funds from US stock investments to India becomes seamless, allowing your gains to flow back home without complications.
