The interest among Indians to buy shares of companies listed in the US has been on an uptrend. A lot of people are now interested in buying shares of companies like Google, Facebook, Tesla, Intel, Microsoft etc.
These are companies which are listed in the US but are not listed in India. As these companies are doing good and have huge profit earning potential, these shares are attracting a lot of investor interest from across the Globe.
How Indians can invest in Shares listed in the US?
To help Indians invest in shares listed in the US, many brokerage houses like ICICI Direct, Reliance Money, India Infoline, Kotak Securities etc have tied up with foreign brokerage houses to facilitate investments and trading in international markets.
These Indian brokerage houses act as an intermediary between the investor and the foreign brokerage houses.
An investor would first be required to open an overseas trading account for trading in shares listed in the international market.
While opening an overseas trading account, the investor would be required to mention the countries in which he would like to invest and then your application would be sent to the brokerage house of that country for registration.
Along with an international trading account, the investor would also be required to open a bank account in the country in which he intends to invest. He would first be required to transfer funds from the Indian bank account to the foreign bank account by furnishing the A2 Form.
Once all the formalities are completed and the funds are transferred in the foreign bank account, the investor is ready to start investing and trading in shares listed in countries outside India.
How much Investments are Indians allowed to make in Shares listed abroad?
Indian Investors interested in investing in shares and assets located outside India can make use of the Liberalised Remittance Scheme (LRS) which allows Indians to invest in shares listed outside India.
The Liberalised Remittance Scheme was introduced by RBI in the year 2004 and several amendments have been made to this scheme since 2004.
The maximum limit on investing abroad under the LRS Scheme currently is $2,50,000 pa w.e.f 26th May 2015.
There is no limit on the frequency of number of remittances. However, the above limit of $2,50,000 also includes remittances for the purpose of gift/loan/donations.
Moreover, there is no such condition that the amount invested abroad has to be brought back to India and therefore the amount which has been invested abroad can be retained and reinvested in overseas assets.
Disclosure of these Assets in the Income Tax Return
If you hold any assets outside India – then these are required to be reported in your Income Tax Return as Foreign Assets. These shares would also be considered as Foreign Assets and therefore would be required to be reported in the Income Tax Return.