Investing

How to Invest in US Stocks From India: SpaceX, Nvidia and the $250,000 Line

SpaceX listed on Nasdaq in June 2026, so the question is no longer whether Indians can buy it. It is the $250,000 LRS ceiling, 20% TCS above Rs 10 lakh, and a capital gains rule that treats foreign shares harshly.

By The Indian Markets Desk 14 min read

The stock nobody could buy is now just a ticker#

For years, SpaceX was the standing answer to "what would you buy if you could?" You couldn't. It was private, and Indian residents had no clean route to its shares anyway.

That ended on 12 June 2026. Space Exploration Technologies Corp listed on Nasdaq under the symbol SPCX, priced at $135 a share and raising about $75 billion, the largest initial public offering on record. It now files quarterly reports with the US Securities and Exchange Commission like any other listed firm, the latest on 4 August 2026. At the close of 25 September 2026 the stock was at $148.68, valuing the company near $2.02 trillion.

So the question changed shape. Not whether you can own a piece of Starship, but what stands between a savings account in Pune and a Nasdaq order book: a remittance ceiling, a 20% tax collection, and a capital gains rule that treats your Nvidia shares less kindly than your Reliance shares.

Two acronyms decide what you are allowed to buy#

Sending money out of India is not free-form. It runs through the Liberalised Remittance Scheme, or LRS, a Reserve Bank facility under which authorised dealers "may freely allow remittances by resident individuals up to USD 2,50,000 per Financial Year (April-March)". One ceiling covers everything: a holiday in Bali, a child's tuition in Boston, a gift to a cousin, your share purchases. Spend it on travel and it is gone for stocks. The scheme is open to all resident individuals including minors, so a household has more than one limit to work with.

The second acronym decides what those dollars may buy. Since August 2022 the Foreign Exchange Management (Overseas Investment) Rules have split overseas investment in two.

Overseas Portfolio Investment, or OPI, is the ordinary case. You buy shares of a listed foreign company, well below 10% of its equity, with no control. Buying SPCX or Nvidia through a broker is OPI, and it counts against the $250,000.

Overseas Direct Investment, or ODI, is the awkward case. The rules define it to include "acquisition of unlisted equity capital of a foreign entity", so buying into an unlisted foreign company is ODI rather than OPI. A resident individual may only make ODI in an operating foreign entity "not engaged in financial services activity and which does not have subsidiary or step down subsidiary where the resident individual has control".

One carve-out matters if you work for a multinational. The RBI's Overseas Investment Directions treat shares acquired "by way of sweat equity shares or minimum qualification shares or under Employee Stock Ownership Plan (ESOP)/ Employee Benefits Scheme up to 10% of the paid-up capital/stock, whether listed or unlisted, of the foreign entity and without control" as OPI. If your employer's foreign parent is private, your ESOP is still portfolio investment.

Read that twice if a platform has offered you "pre-IPO" shares in the next SpaceX. An unlisted foreign company sits in a different regime with conditions attached, and SEBI has separately cautioned investors about platforms dealing in unlisted securities that it neither authorises nor recognises.

Three doors, and they are not equally open#

A foreign brokerage account#

You open an account with a US or US-facing broker, remit rupees under LRS, and buy shares directly. Fractional buying is standard: Interactive Brokers offers more than 10,500 US stocks and ETFs in fractions, with orders from $1, so a Rs 5,000 purchase of a $225 share works. One myth needs killing. Zero-commission US trading is largely a product for US residents; Indians trade on tiered schedules, which at Interactive Brokers means $0.0035 per share with a $0.35 minimum per order.

GIFT City#

India's offshore centre in Gujarat answers to the International Financial Services Centres Authority rather than SEBI or the RBI. In August 2025 IFSCA notified a revamped Global Access framework whose stated purpose is that "Indian retail investors participating through the Liberalised Remittance Scheme (LRS) route, will be able to access global markets" through licensed intermediaries. NSE International Exchange has also run unsponsored depository receipts on US stocks since 2022, trading Apple, Alphabet, Amazon and Microsoft on a T+3 basis. A receipt stands for a slice of a real share held by a custodian, allowing small ticket sizes, and the class still appears in the exchange's circulars this year. The money still leaves under LRS and counts against the $250,000.

An Indian mutual fund#

The least paperwork, the most frustration. A SEBI circular of 3 June 2021 caps overseas investment at US $1 billion per mutual fund "within the overall industry limit of US $7 billion", with a separate ceiling of $300 million per fund inside a $1 billion industry limit for overseas exchange-traded funds. That 2021 circular is still the operative limit. The industry association AMFI was still asking for a rethink in June 2026, arguing that fund redemptions land back in a domestic bank account and so return capital to India, unlike LRS. Until that changes, international schemes open and shut as headroom appears, and some cap subscriptions per PAN each month. One accepting your SIP today may stop next quarter, so read its latest addendum.

Where the money is actually going#

Indian retail money remitted abroad for overseas equity
and debt, under the Liberalised Remittance Scheme, USD bn

FY23   1.26  #############                 4.6% of all LRS outflow
FY24   1.51  ###############               4.8% of all LRS outflow
FY25   1.69  #################             5.7% of all LRS outflow
FY26   2.65  ##########################    9.1% of all LRS outflow
             +----+----+----+----+----+----+
             0   0.5  1.0  1.5  2.0  2.5  3.0

Bars start at zero. Figures from Reserve Bank of India Bulletin Table 36, as reported by Business Standard for FY24, FY25 and FY26. The FY23 figure is implied from the reported 20.29% rise into FY24 rather than read directly, and shown for shape only.

Total LRS outflows have shrunk for two years, from a peak of $31.73 billion in FY24 to $28.98 billion in FY26, dragged down by travel and a 20.9% fall in overseas education. Investment went the other way, up 56.10% to $2.65 billion, roughly doubling its share of the total in three years. The trend held into this financial year: in June 2026 alone, equity and debt remittances of $456.7 million more than doubled year on year.

That reading is interpretation, not gospel: the RBI publishes amounts, not motives. But fewer Indians are flying abroad and more are buying abroad.

The Rs 10 lakh step to plan around#

Cross Rs 10 lakh of LRS remittances in a financial year and your bank collects tax at source at 20% on the excess.

The provision now sits in section 394 of the Income-tax Act, 2025, which came into force on 1 April 2026 in place of the 1961 Act. Its table sets no collection on LRS remittances up to Rs 10 lakh, then "20% for purposes other than education or medical treatment". A 2026 amendment cut the education and medical rate from 5% to 2%. Investment was left alone.

Two points. This is not a tax on buying shares. Tax collected at source is a prepayment, credited against your income tax for the year and refunded if it exceeds what you owe. And Rs 10 lakh is a cumulative annual threshold across all your LRS spending, so a family holiday in March can push a September share purchase over the line.

It is a cash-flow problem, not a cost. Send Rs 15 lakh abroad and Rs 1 lakh of it sits with the government until you file.

Then there is the spread nobody quotes. Banks and platforms add a currency conversion markup on the way out, one platform putting the bank's cut at 0.5% to 1.2%, with a transfer fee on top. On Rs 5 lakh, a 1% markup is Rs 5,000 before you own anything. Ask your bank the blunt version: if I send Rs 1,00,000 today, how many dollars reach my account?

India taxes your Nvidia differently from your Reliance#

Take dividends first. The United States withholds tax on dividends paid to foreign investors at 30% by default. The India-US tax treaty reduces that to 25% for a portfolio investor, and you claim it by filing Form W-8BEN with your broker, a one-page declaration that you are not a US person. File it. Skipping it costs you five percentage points for nothing. Nvidia pays $0.25 a share quarterly, so the sums stay small unless you hold a lot.

That dividend is then taxable in India too, as income from other sources at your slab rate. You then claim the US tax as a foreign tax credit, through Form 44 under Rule 76 of the Income-tax Rules, 2026, which replaces Form 67 and falls due within twelve months of the tax year ending. Note the limit: the credit cannot exceed the Indian tax on that dividend, so anyone in a slab below 25% cannot recover all the US withholding. Nor is it automatic. Miss the form, lose it.

Capital gains bring two rules, both unfavourable.

A US-listed share becomes long-term only after 24 months, not 12. The twelve-month rule applies to a "security listed in a recognised stock exchange in India", and Nasdaq is not in India. Sell inside 24 months and the gain is short-term, taxed at your slab rate, up to 30% plus surcharge and cess. Hold longer and it is long-term at 12.5% without indexation.

The second rule is the one that stings. That familiar Rs 1.25 lakh of tax-free long-term gains does not exist here. The exemption requires securities transaction tax to have been paid under Indian law, and STT cannot be paid on a Nasdaq trade. Held three years, an Indian share and a US share face the same 12.5% rate, but on the US share it applies from the first rupee.

Then, disclosure. Hold foreign shares and Schedule FA of your return becomes mandatory, reported on a calendar-year basis, and only ITR-2 and ITR-3 carry it for individuals. The Black Money Act allows a penalty of Rs 10 lakh for failing to disclose or misreporting foreign assets. A 2024 amendment shields non-immovable assets under Rs 20 lakh from that penalty, but not from the duty to report. File the schedule regardless.

Key takeaways#

  1. SpaceX listed on Nasdaq as SPCX on 12 June 2026 in the largest IPO on record, and is now reachable by the same routes as Nvidia.
  2. Every rupee you send abroad competes for one ceiling: USD 250,000 per person per financial year, covering travel, education, gifts and investment.
  3. Listed foreign shares are portfolio investment. Unlisted foreign equity is a conditional regime, so treat pre-IPO offers with care; foreign ESOPs under 10% are the exception.
  4. TCS of 20% applies to LRS remittances above Rs 10 lakh a year for investment. It is a refundable prepayment, not a cost, but it locks up cash until you file.
  5. Foreign shares need 24 months to turn long-term, the Rs 1.25 lakh exemption does not reach them, and Schedule FA disclosure is compulsory whatever the holding is worth.

Frequently asked questions#

Is it legal for an Indian resident to buy US shares? Yes. Buying listed foreign shares is permitted overseas portfolio investment under the Overseas Investment Rules, 2022, funded within the LRS limit.

How much can I invest in a year? Up to USD 250,000 per financial year per individual, shared with all your other foreign spending. Family members have their own separate limits.

Do I pay 20% tax when I send money abroad? No. You pay nothing on the first Rs 10 lakh of LRS remittances in a year. Above that, 20% is collected at source on investment remittances and credited back against your income tax.

Can I buy part of a share? Yes. Most platforms serving Indian investors offer fractional shares, and GIFT City depository receipts are fractional by design.

Is GIFT City cheaper than a US broker? Sometimes. Neither route attracts Indian securities transaction tax or stamp duty, so that is not the difference. What varies is the conversion markup, the brokerage and the receipt's own spread. Compare those rather than assuming.

Why can't I start a SIP in an international mutual fund? SEBI caps the industry's overseas investment at $7 billion, with $1 billion for overseas ETFs. Fund houses have been closing and reopening schemes against that ceiling, which suggests little headroom is left, though SEBI does not publish live utilisation.

What happens if I don't declare my US shares? Schedule FA omissions can attract a Rs 10 lakh penalty under the Black Money Act. Holdings under Rs 20 lakh are shielded from that penalty, not from the duty to report.

Should I buy SPCX or Nvidia? Not a question this article answers. Both are volatile single stocks priced in a foreign currency, and currency moves affect your rupee return independently of the share price.

Glossary#

LRS, Liberalised Remittance Scheme. The RBI facility permitting resident individuals to send up to USD 250,000 abroad each financial year for permitted purposes.

OPI, Overseas Portfolio Investment. Buying foreign securities without control, typically a small stake in a listed company. The normal route for share purchases.

ODI, Overseas Direct Investment. Includes acquiring unlisted foreign equity, or 10% or more of a listed foreign company, or any stake carrying control. Conditional for individuals.

TCS, Tax Collected at Source. Tax the bank collects when you remit, which you then claim back against your income tax liability.

DTAA, Double Taxation Avoidance Agreement. A treaty limiting how much each country may tax the same income. India's with the US caps dividend withholding at 25%.

Foreign tax credit. Relief for tax already paid abroad, claimed in India through Form 44, previously Form 67.

Unsponsored depository receipt. A tradable receipt representing a share held by a custodian, created without the underlying company's involvement. Used at GIFT City to make US shares fractional.

Schedule FA. The part of the Indian income tax return where residents disclose foreign assets, reported on a calendar-year basis.

References#

  1. Reserve Bank of India, Master Direction, Liberalised Remittance Scheme, FED Master Direction No. 7/2015-16, updated 6 September 2024
  2. Ministry of Finance, Foreign Exchange Management (Overseas Investment) Rules, 2022, G.S.R. 646(E), 22 August 2022, and Reserve Bank of India, Foreign Exchange Management (Overseas Investment) Directions, 2022, A.P. (DIR Series) Circular No. 12, 22 August 2022
  3. US Securities and Exchange Commission, EDGAR filings of Space Exploration Technologies Corp, CIK 0001181412
  4. TechCrunch, SpaceX officially prices shares at $135 in the largest IPO ever, 11 June 2026
  5. StockAnalysis, SpaceX (SPCX) quote and NVIDIA (NVDA) quote, close of 25 September 2026
  6. NVIDIA, Financial results for the second quarter of fiscal 2027, 26 August 2026
  7. Securities and Exchange Board of India, Circular on enhancement of overseas investment limits, SEBI/HO/IMD/IMD-II/DOF3/P/CIR/2021/571, 3 June 2021
  8. Securities and Exchange Board of India, Transaction in securities of unlisted public limited companies on various platforms, press release 32/2026, 17 June 2026
  9. International Financial Services Centres Authority, Revamped regulatory framework for global access in the IFSC, press release, 12 August 2025
  10. NSE Indices/NSE IFSC, NSE IFSC Receipts on US stocks, and NSE International Exchange, trading circular 011/2026, 19 January 2026
  11. Income Tax Department, Section 394, Income-tax Act, 2025
  12. Income Tax Department, Income-tax Act, 2025 comes into force from 1 April 2026, 1 April 2026
  13. Income Tax Department, India-United States Double Taxation Avoidance Agreement, notified 20 December 1990
  14. Internal Revenue Service, NRA withholding and About Form W-8BEN
  15. Income Tax Department, Section 92, Section 197 and Section 198, Income-tax Act, 2025
  16. Income Tax Department, Income-tax Act, 2025 as amended by Finance Act, 2026, section 2(101)
  17. Central Board of Direct Taxes, FAQs on Form No. 44 and Form No. 45
  18. Income Tax Department, Schedule FA and Section 43, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
  19. Business Standard, reporting of RBI Bulletin Table 36 for FY24 (21 May 2024), FY25 (22 May 2025), FY26 (22 May 2026) and June 2026 (25 August 2026)
  20. Interactive Brokers, Fractional trading and stock commissions
  21. INDmoney, INR to USD conversion and forex markup
  22. Outlook Money, AMFI reiterates need to relook mutual funds' $7 billion overseas investment limit, 28 June 2026

This article is journalism, not investment advice. Rules on remittances and taxation change, and market prices quoted are as at the close of 25 September 2026. Confirm current provisions with the RBI, the Income Tax Department and a qualified adviser before acting.