| Every schedule in your ITR runs April–March — except Schedule FA, which runs 1 January 2025 to 31 December 2025. Reporting US stocks on the financial year instead of the calendar year is the single most common foreign-asset filing error. |
By Dinesh Kumar S · Published 30 March 2026 · 25 min read
Almost every Indian resident filing ITR-2 for US stocks this year will fill one schedule incorrectly — and it is not the capital-gains schedule. It is Schedule FA, the foreign-assets disclosure, and the error is structural: Schedule FA reports on the calendar year, 1 January 2025 to 31 December 2025, while every other schedule in the same return reports on the financial year, 1 April 2025 to 31 March 2026. Get this one asymmetry wrong and your declared foreign-asset values will not reconcile with the data the Income-tax Department already holds from the US under automatic information exchange — and the penalty for that is not a tax adjustment. It is a flat ₹10 lakh per year under Section 43 of the Black Money Act, charged even when every rupee of income was honestly declared and taxed.
This guide is written for the Vested, INDmoney, Winvesta and direct-brokerage investor, and for anyone holding RSUs or ESPP of a US-listed employer. It walks the full compliance chain from primary sources: the Schedule FA calendar-year trap; why US-stock long-term gains fall under Section 112 and not Section 112A (so the ₹1.25 lakh exemption everyone assumes simply does not exist for foreign equity); how the 25% US dividend withholding is recovered through Form 67 and the India-US tax treaty; the exact INR-conversion rules; the TCS you paid on your LRS remittance and how to get it back; and a rupee-level worked example for a Bengaluru software engineer holding both brokerage stocks and employer RSUs.
The short version, before the detail: file ITR-2 (never ITR-1, which has no Schedule FA at all); report Schedule FA on the calendar year and include every security held at any point during 2025 even if you sold it; tax LTCG at 12.5% under Section 112 with no exemption; file Form 67 before you submit the return to claim foreign tax credit; and if your aggregate non-immovable foreign assets cross ₹20 lakh — which one year of US-employer RSUs usually does — treat Schedule FA accuracy as non-negotiable. Every figure below is anchored to a section, rule, form, treaty article, notification or reported case. Read it once before you file.
In This Article
▸ The Schedule FA Calendar-Year Trap — the One Thing Everyone Gets Wrong
▸ The Black Money Act — ₹10 Lakh a Year, Asset-Based, Not Income-Based
▸ Capital Gains — Section 112, Not 112A (No ₹1.25 Lakh Exemption)
▸ Dividends — 25% US Withholding, Slab Tax in India, Foreign Tax Credit
▸ Form 67 — Deadline, Mechanics, and the File-Before-ITR Rule
▸ The Right Form — Why ITR-2, Why Never ITR-1
▸ INR Conversion — Which Rate, Which Date, for Which Number
▸ TCS on LRS — How It Connects to Your US-Stocks Investment
▸ Vested and INDmoney — the Platform Reports You Actually Need
▸ The Bengaluru Electronic City Worked Example
▸ Five Things This Article Says That Competitors Do Not
▸ Frequently Asked Questions
The Schedule FA Calendar-Year Trap — the One Thing Everyone Gets Wrong
Schedule FA in ITR-2 (and ITR-3) is the only schedule in the entire Indian return that does not run on the April-to-March financial year. It runs on the calendar year. This single asymmetry is the most-missed compliance trap in foreign-asset reporting, and it is why the same return can be simultaneously "correct" for income tax and "incorrectly disclosed" for Black Money Act purposes.
The proof is in the notified form itself. The ITR-2 notified for AY 2025-26 carried table headings reading, verbatim, that you must report foreign assets held "at any time during the calendar year ending as on 31st December 2024". For AY 2026-27 — the form notified by CBDT Notification No. 45/2026 and Notification No. 46/2026 dated 30 March 2026, with corrigenda dated 10 April 2026 — the date simply increments by one year: "calendar year ending as on 31st December 2025". That is the period 1 January 2025 to 31 December 2025, which sits entirely inside FY 2025-26 but is not the same as it.
In practice for AY 2026-27: Schedule S (salary), Schedule HP, Schedule CG (capital gains), Schedule OS (dividends), Schedule FSI and Schedule TR all report 1 April 2025 to 31 March 2026. Schedule FA reports 1 January 2025 to 31 December 2025. The two windows overlap for nine months. The first quarter of calendar 2025 (January–March 2025) belongs to the previous financial year, and the last quarter of FY 2025-26 (January–March 2026) belongs to next year's Schedule FA. They are not interchangeable.
What this means for what you actually report: in Schedule FA you must list every foreign depository account, custodial (brokerage) account, foreign equity and debt interest, foreign cash-value insurance, immovable property, "other capital asset", account with signing authority and trust held at any point during calendar 2025 — even for a single day. A stock you bought in March 2025 and sold in November 2025 still gets a full entry: its initial value at acquisition, its peak value during the holding period in 2025, its closing value (zero, because you no longer held it on 31 December), and the gross proceeds of sale. Everything in rupees, converted using the SBI Telegraphic Transfer Buying Rate on the relevant date.
One genuine ambiguity to flag: "peak value." The Department has issued no binding rule on whether peak means the highest daily-closing value or only the highest month-end value. The conservative practice most chartered accountants serving Bengaluru tech employees follow is the highest daily-closing price within calendar 2025 multiplied by the maximum shares held that day; some platform-generated reports use only the month-end maximum. Both are defensible — pick one method and apply it consistently across every foreign holding. The reason the calendar-year point matters more than any other Schedule FA detail is reconciliation: the Department receives automatic information exchange from the US under FATCA, calibrated to the US calendar tax year. Report on the Indian financial year and your numbers will not match the data already in the Department's hands — and that mismatch is exactly what triggers a Foreign Assets Investigation Unit notice.
The Black Money Act — ₹10 Lakh a Year, Asset-Based, Not Income-Based
Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides that where a resident fails to furnish information, or furnishes inaccurate particulars, about any asset located outside India in the return, the Assessing Officer may direct payment of a penalty of ₹10 lakh. Section 42 imposes the same ₹10 lakh where a resident holding a foreign asset fails to file a return at all. Critically, this penalty attaches to the disclosure failure, not to any tax shortfall.
The controlling case for retail US-stock holders is Ms. Shobha Harish Thawani v. Joint Commissioner of Income-tax, [2023] 154 taxmann.com 564 (Mumbai – Tribunal), decided 9 August 2023. The Mumbai ITAT upheld three separate ₹10 lakh penalties — one each for AY 2016-17, 2017-18 and 2018-19 — against an investor who held a foreign fund interest sourced entirely from legitimate, LRS-remitted funds, and who had offered all the related income to tax in her returns. None of that saved her. The Tribunal held that Section 43 leaves no room to waive the penalty even where the foreign asset's income is disclosed, because the penalty is levied for non-disclosure of the asset in Schedule FA itself — otherwise, the Tribunal reasoned, the Schedule FA column in the return "will itself become otiose or redundant." The asset, not the income, is what the law polices. The case is pending admission before the Bombay High Court, so its holding remains the operative precedent.
There is one important relief. The Finance (No. 2) Act, 2024, effective 1 October 2024, substituted the proviso to Sections 42 and 43. The old carve-out covered only bank accounts with an aggregate balance up to ₹5 lakh. The new proviso is wider: the penalty does not apply where the aggregate value of foreign assets other than immovable property does not exceed ₹20 lakh. But three cautions follow. First, the ₹20 lakh is an aggregate across all your non-immovable foreign assets — INDmoney plus Vested plus employer RSUs plus any foreign bank or retirement account — measured at any time in the year. Second, a single year of RSUs from a US-listed employer routinely breaches it; a senior engineer at a US BigTech firm in Bengaluru will often cross ₹20 lakh on a single vest. Third, the relief is to the penalty only — it does not remove the obligation to disclose. You still fill Schedule FA correctly; the proviso merely means a sub-₹20 lakh, non-immovable lapse should not attract the ₹10 lakh charge.
A later coordinate bench in Vinil Venugopal v. DDIT read the word "may" in Section 43 as conferring discretion rather than a mandatory penalty, which gives bona-fide, fully-disclosed-income filers an argument against penalty for technical lapses. But the CBDT has issued no guidance reconciling this with Thawani. Plan for the worst, argue Venugopal if a notice comes, and — far cheaper — simply get Schedule FA right the first time.
Capital Gains — Section 112, Not 112A (No ₹1.25 Lakh Exemption)
US-listed shares are, for Indian capital-gains purposes, "unlisted shares." Section 112A — which carries the familiar ₹1.25 lakh annual exemption and the 12-month long-term threshold — applies only to equity shares listed on a recognised stock exchange in India on which Securities Transaction Tax has been paid. NYSE, NASDAQ and CBOE are not recognised Indian exchanges, and no STT is paid on US trades. So US stocks fall under Section 112, full stop.
| US stocks are "unlisted shares" for Indian tax — they fall under Section 112, not Section 112A. The ₹1.25 lakh LTCG exemption everyone assumes applies does not apply to a single rupee of US-stock gain. |
The Finance (No. 2) Act, 2024 amended Section 112 for transfers on or after 23 July 2024 to a flat 12.5% without indexation. The CBDT's own FAQ of 24 July 2024 confirms the rate for other long-term capital gains was rationalised to 12.5% without indexation under Section 112, and that the holding period for unlisted shares remains 24 months. The practical consequences for a US-stock investor are stark:
| Feature | Indian listed equity (Sec 112A) | US stocks (Sec 112) |
| LTCG holding period | > 12 months | > 24 months |
| LTCG rate (on/after 23 Jul 2024) | 12.5% | 12.5% flat |
| ₹1.25 lakh annual exemption | YES | NO |
| Grandfathering (pre-31 Jan 2018) | YES | NO |
| Indexation | NO | NO |
| STCG rate | 20% (Sec 111A) | Slab rate |
| STCG holding period | ≤ 12 months | ≤ 24 months |
The exemption myth deserves a direct correction because so many Indian US-stocks explainers repeat it: the ₹1.25 lakh annual exemption lives in the proviso to Section 112A(2) and is confined to equity shares, equity-oriented fund units and business-trust units on which STT is paid. Foreign equity does not qualify. Every rupee of long-term gain on a US stock is taxable at 12.5% — there is no tax-free first slice. Short-term gain (holding 24 months or less) is added to total income and taxed at your marginal slab, which for a 30%-bracket Bengaluru engineer is materially higher than the 20% that applies to Indian listed STCG. The companion explainer on the wider 2024 capital-gains overhaul is at mutual fund tax India — STCG, LTCG and the Budget 2024 changes.
Dividends — 25% US Withholding, Slab Tax in India, Foreign Tax Credit
When a US company pays a dividend to an Indian-resident shareholder who has filed Form W-8BEN with the broker, the US withholds tax at 25% under Article 10(2)(b) of the India-US Double Taxation Avoidance Agreement — the "all other cases" rate. The lower 15% rate in Article 10(2)(a) is available only to a company holding at least 10% of the payer's voting stock, so retail investors never qualify. Without a valid W-8BEN, the US default withholding is 30%.
In India, that dividend is taxed under "Income from Other Sources" at your slab rate. Since the Finance Act 2020 abolished Dividend Distribution Tax, dividends are taxed in the recipient's hands, and there is no concessional rate for foreign dividends — the gross dividend (before US withholding) is added to total income. The treaty's 25% figure caps the source country's right to tax (the US withholding); it does not cap India's right to tax its residents on global income. So a 30%-slab investor pays 30% plus surcharge and cess on the gross dividend in India and claims credit for the US tax already paid; she does not get to limit Indian tax to 25%.
The double tax is relieved through the Foreign Tax Credit under Article 25(2)(a) of the treaty, operationalised in domestic law by Section 90 and Rule 128, and claimed by filing Form 67. The credit is the lower of (a) the US tax actually paid, or (b) the Indian tax payable on that same foreign income. On ₹100 of US dividend, a 30%-plus-cess investor owes about ₹31.20 in India and credits the ₹25 US tax, paying ₹6.20 net extra. A low-slab investor whose Indian tax on the dividend is only, say, ₹5.20 credits just ₹5.20 — the unused ₹19.80 of US tax is simply lost, because neither the Act nor the treaty allows carry-forward of unutilised FTC.
Form 67 — Deadline, Mechanics, and the File-Before-ITR Rule
Form 67 is the prescribed statement for claiming Foreign Tax Credit. It must be filed electronically on the income-tax portal — there is no paper option — supported by a statement of the foreign income and the foreign tax paid (the broker's Form 1042-S for US dividends serves this purpose).
The deadline for AY 2026-27 is 31 March 2027 — the end of the relevant assessment year — under Rule 128(9) as amended by CBDT Notification 100/2022 dated 18 August 2022 (which relaxed the earlier "due date of return" deadline). For an updated return under Section 139(8A), Form 67 must be filed on or before the date of that updated return.
But the law's outer deadline is not the deadline you should work to. The CPC's automated processing under Section 143(1) checks for Form 67 at the moment of intimation; if it is not already on record, the system mechanically disallows the FTC and raises a demand. Tribunals and High Courts — the Bangalore ITAT in Brinda RamaKrishna v. ITO, the Madras High Court in Duraiswamy Kumaraswamy, and the Indore ITAT in 2026 — have repeatedly held that Form 67 is directory, not mandatory, and that a treaty-based FTC cannot be defeated by a procedural delay. But winning that point takes months of litigation you do not want. File Form 67 first, then the ITR, on the same day or with a short gap, so the credit is on record before processing.
The Right Form — Why ITR-2, Why Never ITR-1
ITR-1 (Sahaj) does not contain Schedule FA at all. By design, it is unavailable to any resident holding foreign assets or earning foreign income. So filing ITR-1 when you hold US stocks is not merely the wrong form — it is itself an act of non-disclosure, because the foreign asset is structurally invisible in that return. That is direct exposure to Section 43 of the Black Money Act, separate from and additional to getting Schedule FA's calendar year wrong.
The correct form for a typical INDmoney or Vested investor, and for most US-listed-company RSU recipients, is ITR-2 — salary plus capital gains plus foreign assets, with no business income. If you also have business or professional income, use ITR-3. ITR-4 (presumptive business) is not relevant. For AY 2026-27, ITR-1's scope expanded to two house properties under Notification 45/2026, but the foreign-asset exclusion is unchanged — a foreign holding still pushes you to ITR-2.
Two AY 2026-27 form changes matter for US-stock holders. The Schedule AL (Assets and Liabilities) reporting threshold rose from ₹50 lakh to ₹1 crore of total income — but Schedule FA remains mandatory at any income level. And the updated-return window under Section 139(8A) was extended, so earlier years with a missed Schedule FA can still be corrected by an updated return. For the broader filing-form decision, see tax on freelance income India — ITR filing and regime choice.
INR Conversion — Which Rate, Which Date, for Which Number
This is the most error-prone mechanical part of the return, because three different conventions apply to three different numbers, and all of them use the SBI Telegraphic Transfer Buying Rate (TTBR) — but on different dates.
For capital gains (Schedule CG), under Rule 115, the sale consideration is converted using the TTBR on the last day of the month immediately preceding the month of sale, and the cost of acquisition using the TTBR on the last day of the month preceding acquisition. Rule 115A (the special rule for NRIs holding Indian-company shares) does not apply to US stocks held by residents — use Rule 115.
For dividend income (Schedule OS), again under Rule 115, the gross dividend is converted using the TTBR on the last day of the month preceding the month the dividend is paid or credited. For the Foreign Tax Credit (Form 67 and Schedule TR), Rule 128(1) applies a different convention — the US tax withheld is converted using the TTBR on the last day of the month preceding the month in which the tax was paid or deducted. For a dividend paid and taxed on the same date, the two dates coincide; if income and tax fell in different months, the rates could differ.
For Schedule FA itself, the initial value uses the TTBR on the acquisition date, the peak value uses the TTBR on the peak date within calendar 2025, and the closing value uses the TTBR on 31 December 2025. SBI publishes the TTBR daily; community archives (the sbi-fx-ratekeeper project on GitHub, and mksco.in/forexrate) preserve historical rates that SBI itself does not retain publicly for long. Pull and save every month-end rate from December 2024 through December 2025 before you start.
TCS on LRS — How It Connects to Your US-Stocks Investment
Buying US stocks through INDmoney, Vested, Winvesta or any direct overseas broker uses the RBI's Liberalised Remittance Scheme (LRS), under which a resident may remit up to USD 250,000 per financial year for permitted purposes including foreign equity. On that remittance, your bank collects Tax Collected at Source.
From 1 April 2025 (Budget 2025, Section 206C(1G) as amended), the TCS threshold rose from ₹7 lakh to ₹10 lakh per financial year. Below ₹10 lakh of aggregate LRS remittance, there is no TCS. Above ₹10 lakh for investment purposes (US stocks, foreign funds, overseas property), TCS is 20% on the excess. (Education funded by a Section 80E loan is 0%; self-funded education or medical remittance is 5% above ₹10 lakh for FY 2025-26.)
The crucial point most investors miss: TCS is not an extra tax — it is an advance tax credit. The bank collects it at the time of remittance, it appears against your PAN in Form 26AS / AIS, and it is fully adjustable against your income-tax liability when you file. If your total tax for the year is less than the TCS collected, the balance is refunded. Concretely: remit ₹18 lakh for US stocks in FY 2025-26 and the first ₹10 lakh is exempt, the next ₹8 lakh attracts 20% = ₹1.6 lakh TCS at remittance; that ₹1.6 lakh is then set off against your final tax bill when you file ITR-2. No money is lost — only the working-capital float for about a year.
Vested and INDmoney — the Platform Reports You Actually Need
Both platforms route Indian residents' trades through US-registered broker-dealers: Vested through VF Securities, Inc. (member FINRA/SIPC), with DriveWealth as clearing firm; INDmoney through DriveWealth LLC and Alpaca Securities LLC, both SEC- and FINRA-regulated. SIPC protection covers securities and cash in a customer account up to USD 500,000 if the US broker fails. Each platform generates India-specific tax statements you should download for calendar year 2025, not the financial year.
On INDmoney (More → Taxation & Reports → US Stocks) you get a capital-gains statement pre-classified into STCG and LTCG and pre-converted to INR, an FA-schedule statement formatted for Schedule FA Tables A2/A3, an FSI statement, and a Form 67 data summary of US tax withheld. On Vested (Profile → Tax Documents) you get an INR-converted annual capital-gains report, a dividend-and-withholding statement based on Form 1042-S, a Schedule FA worksheet, and a ClearTax integration for direct upload.
One caution that matters: these reports are helpful, not authoritative. They apply one defensible "peak value" interpretation (usually month-end maximum), and — crucially — they cannot see positions held outside their platform, such as employer RSU shares sitting in a Morgan Stanley, E*Trade or Schwab account. For both Schedule FA and the Black Money Act ₹20 lakh threshold, you must aggregate across all foreign holdings yourself. On platform safety more broadly, the related read is how to check if a financial provider is genuinely registered.
The Bengaluru Electronic City Worked Example
Arjun, 32, is a senior software engineer at a US-listed BigTech company in Electronic City, Bengaluru. For FY 2025-26: gross salary ₹30 lakh including roughly ₹5 lakh of RSU perquisite (200 shares vested 15 May 2025); an INDmoney portfolio of 30 Apple shares bought 12 March 2024 at USD 175 and 15 NVIDIA shares bought 5 February 2025 at USD 700; 120 net employer RSU shares (in a Morgan Stanley account) after sell-to-cover; sales during the year of all 30 AAPL on 10 October 2025 at USD 235 and 5 NVDA on 20 November 2025 at USD 950; and an AAPL dividend of USD 72 gross (USD 18 withheld at 25%, USD 54 net) credited 15 August 2025.
| Arjun, Electronic City: AAPL + NVDA via INDmoney and 120 employer RSUs. His aggregate foreign assets cross ₹20 lakh, so the Black Money Act carve-out is gone — every line in Schedule FA must be exact. |
Schedule FA (calendar year 2025) — Table A3
| Security | Initial value | Peak value | Closing value (31 Dec) | Proceeds of sale |
| Apple Inc (USA) | ≈ ₹4,38,750 | ≈ ₹6,21,810 | 0 (sold Oct 2025) | ≈ ₹5,93,250 |
| NVIDIA Corp (USA) | ≈ ₹8,89,350 | ≈ ₹12,46,800 | ≈ ₹7,93,365 (10 sh) | ≈ ₹4,02,275 (5 sh) |
| Employer RSU (US BigTech) | ≈ ₹29,91,300 | ≈ ₹34,57,440 | ≈ ₹32,52,480 | 0 (not sold) |
Arjun's aggregate non-immovable foreign-asset value is far above ₹20 lakh, so the Black Money Act Section 43 carve-out is unavailable — all three lines must be disclosed accurately, on the calendar year.
Schedule CG — Section 112 (STCG at slab)
AAPL: bought 12 March 2024, sold 10 October 2025 — holding 19 months, so short-term. Gain = (USD 235 − USD 175) × 30 = USD 1,800, converted at the TTBR for end-September 2025 ≈ ₹1,51,560 STCG at slab. NVDA: bought 5 February 2025, sold 20 November 2025 (5 shares) — holding 9 months, short-term. Gain = (USD 950 − USD 700) × 5 = USD 1,250 ≈ ₹1,05,250 STCG at slab. The RSU shares were not sold, so no capital-gains entry this year; when sold later, their cost basis is the FMV taken as perquisite at vesting under Section 49(2AA). Net STCG ≈ ₹2,56,810, taxed at slab. No LTCG this year (nothing foreign held over 24 months was sold).
Schedule OS — dividend
AAPL dividend USD 72 × end-July 2025 TTBR ≈ ₹6,084 gross, taxed at slab.
Form 67 / Schedule TR — Foreign Tax Credit
US tax withheld USD 18 ≈ ₹1,521 FTC (Rule 128 conversion). At 30% + cess, Indian tax on the ₹6,084 dividend is ≈ ₹1,898; the ₹1,521 credit reduces the net additional Indian tax on the dividend to ≈ ₹377.
Tax computation summary (illustrative, new regime FY 2025-26)
| Item | ₹ |
| Salary (incl. RSU perquisite) | 30,00,000 |
| STCG on US stocks (at slab) | 2,56,810 |
| Gross US dividend | 6,084 |
| Gross total income | 32,62,894 |
| Less Chapter VI-A (illustrative) | (2,50,000) |
| Total income | 30,12,894 |
| Tax + 4% cess (approx) | ~6,22,960 |
| Less FTC (Form 67) | (1,521) |
| Less TDS on salary | (5,80,000) |
| Less TCS on LRS (< ₹10 lakh remitted → nil) | (0) |
| Self-assessment tax payable | ~41,439 |
Arjun files Form 67 first (say by 30 June 2026), then ITR-2 by 31 July 2026, and e-verifies within 30 days. Had he instead reported Schedule FA on the financial year, or filed ITR-1 because "his income is mostly salary," his exposure would be ₹10 lakh per affected year under Section 43 — with aggregate assets above ₹20 lakh the carve-out does not help — plus possible prosecution under Section 50. The downside is wildly out of proportion to the few hours of work involved.
Five Things This Article Says That Competitors Do Not
1. Schedule FA is calendar-year (CY 2025 for AY 2026-27), not financial-year. The notified ITR-2 table headings ("calendar year ending as on 31st December 2025") are the controlling text. Most blogs and even some CAs default to the financial year.
2. US-stock LTCG is under Section 112, not 112A — the ₹1.25 lakh exemption does NOT apply. Wrongly claiming the exemption overstates your tax-free gains by up to ₹1.25 lakh a year and is a misreporting risk.
3. The Black Money Act penalty is asset-based, not income-based (Thawani, Mumbai ITAT, 9 August 2023). Declaring the dividend correctly in Schedule OS does not insulate you from a ₹10 lakh-per-year Section 43 penalty if Schedule FA is wrong or missing.
4. Filing ITR-1 with a foreign holding is itself non-disclosure — ITR-1 has no Schedule FA, so the foreign asset is structurally invisible to the Department.
5. Every security held at any point in CY 2025 must appear in Schedule FA — even if sold before 31 December. A stock bought in February 2025 and exited in August 2025 still needs a full Table A3 entry with peak value, initial value, closing value of zero, and proceeds of sale.
Frequently Asked Questions
What is Form 67 in INDmoney?
Form 67 is not specific to INDmoney — it is the Income-tax form for claiming Foreign Tax Credit under Section 90 read with Rule 128. INDmoney generates a Form 67 data summary in its app (the US tax withheld, country code, income type) so you can enter those figures into the actual Form 67 you file yourself, electronically, on incometax.gov.in. File it before submitting ITR-2, by 31 March 2027 at the latest for AY 2026-27.
What is Schedule FA in ITR-2?
Schedule FA (Foreign Assets) is the section of ITR-2 and ITR-3 where a resident-and-ordinarily-resident individual reports every foreign asset held at any time during the calendar year. It has tables for foreign depository accounts (A1), custodial/brokerage accounts (A2), foreign equity and debt — where US stocks go (A3), cash-value insurance (A4), financial interests (B), immovable property (C), other capital assets (D), accounts with signing authority (E), trusts (F) and other foreign income (G). It is a disclosure schedule, not a tax-computation one — but non-disclosure triggers Black Money Act Section 43.
Is it safe to invest in US stocks through INDmoney?
INDmoney's underlying US broker-dealers (DriveWealth LLC and Alpaca Securities LLC) are SEC- and FINRA-regulated, and SIPC protects securities and cash in a US brokerage account up to USD 500,000 if the broker fails. From an Indian standpoint, INDmoney is permitted to facilitate LRS remittances and overseas investment. The platform is not your main risk — your real exposure is Indian tax compliance (correct Schedule FA, Form 67 and ITR-2), which is your personal responsibility regardless of platform.
How to declare US stocks in ITR?
Use ITR-2 (or ITR-3 if you have business income). Report capital gains in Schedule CG under Section 112 (LTCG 12.5%, or STCG at slab); dividends in Schedule OS at slab; the foreign-source breakdown in Schedule FSI; tax relief in Schedule TR; and the calendar-year holding details in Schedule FA Table A3. File Form 67 before submitting the return. Convert USD using SBI TTBR per Rule 115 (income) and Rule 128 (foreign tax credit).
Do RSUs of US-listed employers count as foreign assets?
Yes. Once vested, RSU shares are foreign equity held by an Indian resident through a foreign brokerage account (typically Morgan Stanley, E*Trade or Schwab). They must be reported in Schedule FA Table A3 for the calendar year held, regardless of whether the vesting perquisite was already taxed in Schedule S via Form 16. Reporting the perquisite in salary does not satisfy the separate Schedule FA disclosure obligation.
Does the ₹1.25 lakh LTCG exemption apply to US stocks?
No. The ₹1.25 lakh annual exemption is in Section 112A and applies only to Indian listed equity, equity-fund units and business-trust units on which STT is paid. US stocks fall under Section 112, where there is no exemption and no grandfathering — every rupee of long-term gain is taxed at 12.5%.
Closing
The hard part of taxing US stocks in India is not the rate — it is the disclosure. Get Schedule FA on the calendar year, file ITR-2 and never ITR-1, tax long-term gains at 12.5% under Section 112 with no phantom ₹1.25 lakh exemption, claim back the 25% US dividend tax through Form 67 filed before the return, convert every figure with the right Rule 115 or Rule 128 date, and remember that the Black Money Act polices the asset, not the income. The single most expensive mistake an honest investor can make is reporting everything correctly except the one schedule that runs on a different calendar. Aggregate across every platform and every RSU account, keep the source documents for at least eight years, and when the numbers get large, pay a CA — the downside of getting it wrong is ₹10 lakh a year, and that is not a risk worth saving an afternoon over.
Further Reading on Finance Guided
The Income Tax and Investing cluster posts most directly related to this analysis are linked below.
▸ Mutual fund tax India — STCG, LTCG and the Budget 2024 changes — the wider 12.5% / 20% capital-gains overhaul that reshaped Section 112 and 112A.
▸ Tax on freelance income India — ITR filing and regime choice — the ITR-form decision and old-vs-new regime, relevant when foreign income pushes you to ITR-2/ITR-3.
▸ How to claim home loan interest deduction India — Section 24 — another primary-source-anchored walk through a deduction the SERP routinely gets wrong.
▸ How to check if a financial provider is genuinely registered — verifying the regulatory status of any platform handling your money.
Primary Sources Cited in This Article
· Income-tax Act, 1961 — Section 90 (DTAA relief), Section 112 (LTCG on unlisted/foreign shares, 12.5%), Section 112A (listed equity, ₹1.25 lakh exemption — inapplicable to US stocks), Section 49(2AA) (RSU cost basis), Section 139(1)/(4)/(8A) (return and updated return). Bare Act: incometaxindia.gov.in
· Income-tax Rules, 1962 — Rule 115 (exchange rate for income), Rule 115A (NRI shares — inapplicable here), Rule 128 (Foreign Tax Credit, Form 67), Rule 128(9) deadline as amended by CBDT Notification 100/2022 dated 18 August 2022
· Finance (No. 2) Act, 2024 — Section 112 rationalised to 12.5% without indexation for transfers on/after 23 July 2024; substituted proviso to Black Money Act Sections 42 and 43 (Rs 20 lakh non-immovable carve-out) w.e.f. 1 October 2024. CBDT FAQ dated 24 July 2024 (PIB Press Release ID 2036604)
· Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 — Section 42 (failure to furnish return; Rs 10 lakh), Section 43 (inaccurate/non-disclosure of foreign asset; Rs 10 lakh), Section 50 (prosecution)
· India-US Double Taxation Avoidance Agreement (signed 12 September 1989; in force 18 December 1990) — Article 10 (dividends; 25% in Article 10(2)(b) for non-corporate/retail), Article 25 (relief from double taxation). DTAA repository: incometaxindia.gov.in
· CBDT ITR-2 forms and instructions, AY 2025-26 (Notification 43/2025 dated 3 May 2025) and AY 2026-27 (Notifications 45/2026 & 46/2026 dated 30 March 2026; corrigenda Notifications 57-63/2026 dated 10 April 2026) — Schedule FA table headings confirming calendar-year reporting
· Mumbai ITAT: Ms. Shobha Harish Thawani v. JCIT, [2023] 154 taxmann.com 564 / 226 TTJ 593 (Mum)(Trib.), BMA Nos. 01-03/Mum/2023, order dated 9 August 2023 (penalty upheld; asset-based, not income-based; appeal pending admission before Bombay HC)
· Mumbai ITAT: Vinil Venugopal v. DDIT (Inv.), [2025] 179 taxmann.com 618 (Mum)(Trib.) — "may" vs "shall" discretion under Section 43
· Bangalore ITAT: Ms. Brinda RamaKrishna v. ITO, ITA No. 454/Bang/2021, dated 17 November 2021, [2022] 193 ITD 840 (Bang.)(Trib.) — Form 67 directory not mandatory; Madras HC: Duraiswamy Kumaraswamy v. PCIT (2023); Indore ITAT (2026) to the same effect
· RBI Liberalised Remittance Scheme — USD 250,000 per FY; Income-tax Act Section 206C(1G) TCS (Rs 10 lakh threshold, 20% on investment remittance) as amended w.e.f. 1 April 2025
· SIPC — "How SIPC Protects You" (USD 500,000 customer protection); US broker-dealers VF Securities (FINRA CRD# 315194), DriveWealth LLC, Alpaca Securities LLC
· SBI Telegraphic Transfer Buying Rate (TTBR) — daily reference rate for INR conversion under Rules 115 and 128
Disclaimer: This article is for general information and educational purposes only and does not constitute legal, tax, or financial advice. Statutory references, rule numbers, forms, treaty articles, notification references and case citations are accurate to the best of the author's knowledge as of 20 May 2026 and relate to FY 2025-26 (AY 2026-27) under the Income-tax Act, 1961 and the Black Money Act, 2015. The "peak value" methodology for Schedule FA and the "may vs shall" question under Section 43 are areas of genuine practitioner divergence with no binding CBDT guidance; positions taken should be documented and applied consistently. Whether the India-US DTAA Article 10 rate caps India's slab tax on dividends is contested; the CPC position is that it does not. The Bombay High Court appeal in Thawani is pending admission and could change the controlling principle. Exchange rates, the worked-example figures, and the Bengaluru Electronic City illustration are hypothetical and for explanation only. The author is not a chartered accountant, a registered tax practitioner, or a SEBI-registered adviser; consult a qualified professional registered with the relevant authority — the Institute of Chartered Accountants of India, or an income-tax practitioner — before acting, especially on foreign-asset disclosure, Form 67, and Black Money Act exposure. FinanceGuided.com does not sell investments, insurance or banking products, has no commercial relationship with INDmoney, Vested, Winvesta or any platform named, accepts no commissions, and runs no paid placements. Reproduction of any portion of this article requires written permission from the publisher.
Dinesh Kumar S
Founder & Author — Finance Guided · B.Sc. Mathematics, M.Sc. Information Technology · Chennai, Tamil Nadu
Dinesh writes a regulation-reader's column on Indian personal finance — the kind where every claim is anchored to the actual section number, CBDT circular or notification reference, RBI master direction, DTAA article, or reported case citation it comes from. His standing rule: if a number cannot be traced to a primary source by document number and date, it does not enter the article. If a number can't be sourced, the sentence gets rewritten.
Source authorities routinely cited: CBDT, the Income Tax Department of India, IRDAI, SEBI, RBI, EPFO, and MoHUA. Finance Guided takes no commissions, runs no paid placements, and recommends no specific product by name. Articles are journalism, not advice; consult a CA, a SEBI-registered advisor, or an income-tax practitioner before acting on anything you read here.
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