Valura

GIFT City · IFSC

FY 2025-26
All answers
Direct investing

What happens if I buy US stocks directly?

Three taxes quietly chip away at your returns — and if something happens to you, the US can take up to 40% of your US holdings.

Up to 40%

US estate tax your heirs could owe on US stocks above a $60,000 cushion

Every ₹100 of US dividend — what reaches you

Illustrative, assuming a 30% Indian slab. The US tax is recovered as credit, so it isn't lost twice.

Dividend declared₹100
US withholds upfront (25%)−₹25
Extra Indian tax after credit−₹5
In your hand₹70

Buying US stocks directly vs through GIFT City

Direct
Via GIFT City
Tax on dividends
25% held back by the US (claim the rest later)
~15% at the fund level (Ireland route)
Tax on profits
Taxed in India — 12.5% after 2 years, else your slab
Non-resident: exempt. Resident: same, but simpler
If you pass away
Up to 40% US estate tax above $60,000
₹0 if the underlying is non-US (Ireland UCITS)
Your tax return
List every holding in Schedule FA · ₹10L/yr penalty if missed
One domestic fund line

What to do

  1. 1

    File a W-8BEN with your US broker so the US takes 25%, not the default 30%.

  2. 2

    List every US holding in Schedule FA of your Indian return — even if you made no profit.

  3. 3

    File Form 67 to claim back the US tax before you file your return.

  4. 4

    Compare the GIFT City route — it removes the estate-tax exposure entirely.

Ask the AI advisor about your exact situation

It knows your profile and runs the real tax calculations — not a generic chatbot.

Illustrative only · Rules per Finance Act 2025 (FY 2025-26) · Figures are examples, not advice — confirm with a qualified CA / tax advisor before acting.