Is the capital gains tax 15% or 20% in the United States?

In the US, the short-term capital gains are taxed at the same rate as your basic income. However, the long-term capital gains in the US are taxed at either 0%, 15% or 20%. Here, the tax rate is based on your taxable income. Considering this, there is no single 15% or 20% tax rate in the US on capital gains.

NRI Income Tax & Compliance

Tax Implications of Investing in US Stocks for NRIs and Indian Residents

By Pankaj Shaw |Last Updated: January 7, 2026

Tax Implications of Investing in US Stocks for NRIs and Indian Residents

For NRIs and Indian investors, investing in US stocks offers a diversified portfolio and reduces geographical risk. Through domestic or foreign brokers and indirect investments, you can directly invest in US stocks.

However, if you are considering the tax implications of investing in US stocks for NRI and Indian residents, then you are in the right place. In this blog, you will read about the tax implications that NRIs and Indian residents face while investing in US stocks. Additionally, about the different ways individuals can invest in US stocks. So, read on and gather all the information.

Pankaj Shaw(Tax Expert)

Mr Shaw brings 8 years of experience in auditing and taxation. He has a deep understanding of disciplinary regulations and delivers comprehensive auditing services to businesses and individuals. From financial auditing to tax planning, risk assessment, and financial reporting. Mr Shaw's expertise is impeccable.

Frequently Asked Questions

Yes, as an Indian resident, income from US stocks, whether it is capital gain or dividend, is taxable in India. Considering this, the capital gains are taxed as per the time periods the stocks were held, i.e., long-term or short-term. However, on dividend income 30% standard tax is imposed.

The 7% rule in stock trading is also known as 7% sell rule. This rule is a stop-loss strategy where, if the stock falls 7-8 % below the buying price, you sell that stock. This rule advises the stock investors to accept a maximum decline of 7% from their US stock entry price.

Yes, it is wise to invest in US stocks from India. The US stock market provides intriguing advantages to Indian investors. They offer them the opportunity to diversify globally, reducing risk with different stock markets, specifically a strong one like the US.

Yes, generally, non-US citizens pay some form of US tax on income generated from their US stocks. However, it totally depends on their tax residency status in the country and their tax treaty of their home country with the US.

To avoid the 60% tax trap in the US, topping up a pension helps in reducing your tax obligations. Additionally, it helps you improve your future finances.

Tax Implications of Investing in US Stocks for NRIs and Indian Residents

Frequently Asked Questions

Are US stocks taxable in India?

What is the 7% rule in stock trading?

Is it wise to invest in US stocks from India?

Do non-US citizens pay taxes on US stocks?

How to avoid the 60% tax trap in the US?

Tax Implications of Investing in US Stocks for NRIs and Indian Residents

Frequently Asked Questions

Are US stocks taxable in India?

What is the 7% rule in stock trading?

Is it wise to invest in US stocks from India?

Do non-US citizens pay taxes on US stocks?

How to avoid the 60% tax trap in the US?