How to invest in NASDAQ from India: LRS rules & tax guide

Yes, Indian residents can invest directly in Nasdaq-listed stocks like Apple, Nvidia, and Microsoft. The RBI's Liberalised Remittance Scheme allows you to invest up to $250,000 per financial year, and multiple platforms now let you start with as little as $1.

The Nasdaq-100 delivered a 21% total return in 2025, following a 25.9% return in 2024. Over the past 18 years, its cumulative return has been roughly 1,342% — about 2.4 times the S&P 500's return over the same period. That track record, driven by the world's largest technology companies, is why Indian investors are increasingly looking beyond domestic markets.

This guide walks you through all available routes, regulatory requirements, current tax rules for FY 2025-26, and actual costs.

What is the Nasdaq and why does it matter?

Nasdaq (National Association of Securities Dealers Automated Quotations) is the world's first fully electronic stock exchange, launched in 1971. Unlike the NYSE, which historically used a physical trading floor, Nasdaq operates entirely through automated computer networks.

As of early 2026, Nasdaq hosts over 4,000 listed companies with a combined market capitalisation of approximately $14 trillion. It's best known as the home of the world's biggest technology companies, though it also lists companies across biotechnology, healthcare, consumer services, and industrials.

The Nasdaq-100 index tracks the 100 largest non-financial companies on the exchange. The "Magnificent Seven" — Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla — account for roughly 70% of the index's weight. When people talk about "investing in Nasdaq," they usually mean gaining exposure to this index.

Nasdaq vs NYSE: What's the difference?

Both exchanges are regulated by the SEC and offer world-class liquidity. The choice of exchange doesn't directly affect you as an investor — what matters is the specific stocks and indices you want exposure to.

4 ways to invest in Nasdaq from India

Indian investors have 4 distinct routes, each with different cost structures, minimum investments, and levels of involvement.

1. Direct investment through an international broker

This is the most flexible route. You open an account with a platform that gives you direct access to US exchanges, fund it via wire transfer under LRS, and buy individual Nasdaq-listed stocks or US-listed ETFs like QQQ (Invesco Nasdaq-100 ETF).

Popular platforms for Indian investors:

Important: Charles Schwab and TD Ameritrade (now merged) do not accept Indian residents. If you see them recommended elsewhere, that information is outdated.

The direct route gives you access to all 4,000+ Nasdaq-listed stocks, lets you pick individual companies, and offers the lowest ongoing costs for larger portfolios.

2. Indian mutual funds tracking the Nasdaq-100

If you'd rather skip the foreign exchange process entirely, several Indian AMCs offer funds that track the Nasdaq-100. These are denominated in INR, purchased through your regular demat account or mutual fund platform, and require no LRS paperwork.

Key funds available:

The trade-off: higher expense ratios (you're paying both the Indian fund's fees and the underlying US ETF's fees in the case of FoFs) and tracking error. But for investors starting small or those who want rupee-denominated simplicity, this route works well.

3. GIFT City route (NSE IFSC)

India's GIFT City International Financial Services Centre in Gujarat lets you trade US stocks through the NSE IFSC exchange. Some platforms, such as INDmoney, now offer GIFT City access alongside their direct US broker route.

The GIFT City option is fully FEMA-compliant and regulated by IFSCA. However, the selection of available US stocks remains limited compared to direct international brokers. It's a solid choice if you want a domestically regulated environment.

4. US-listed ETFs via Indian brokers with international partnerships

Several Indian brokers — including ICICI Direct GlobalInvest and HDFC Securities — have partnerships with US brokers. You can access Nasdaq through these partnerships, though fees are typically higher and the range of available securities is narrower than with direct international platforms.

LRS rules: What you need to know

The Reserve Bank of India's Liberalised Remittance Scheme governs how much money you can send abroad for investments.

Current limits for FY 2025-26:

• Maximum remittance: $250,000 per individual per financial year
• This is per person — a family of 4 can collectively invest up to $1 million annually
• Applies to all resident individuals, including minors with a valid PAN
• Covers stocks, ETFs, mutual funds, property, and foreign currency accounts

TCS (tax collected at source) rules (Budget 2025 update):

• Remittances up to ₹10 lakh: 0% TCS
• Remittances above ₹10 lakh: 20% TCS on the amount exceeding the threshold
• TCS is fully refundable as a tax credit when you file your ITR

For example, if you remit ₹15 lakh, TCS applies to ₹5 lakh (the portion above ₹10 lakh), with a ₹1 lakh upfront charge. You claimed this back when filing your return.

Documents required: Active Indian bank account, valid PAN card, passport, and completed KYC with your chosen platform or AD bank.

What's not allowed: FEMA explicitly prohibits Indian residents from engaging in margin and derivatives trading on overseas exchanges. Stick to buying stocks and ETFs outright.

Tax implications for FY 2025-26

Tax is one of the most commonly misunderstood areas for Indian investors in US stocks. Here's what actually applies as of FY 2025-26:

Capital gains tax

US-listed stocks are classified as unlisted securities under Indian tax law (since they're not listed on Indian exchanges). This means:

Critical difference from Indian stocks: The ₹1.25 lakh LTCG exemption under Section 112A does not apply to foreign stocks. Even ₹1 of LTCG on Nasdaq investments is taxable.

Dividend tax

US companies withhold 25% tax on dividends at source (under the India-US tax treaty). The remaining dividend amount is then taxable in India at your slab rate under "income from other sources."

The DTAA (Double Taxation Avoidance Agreement) between India and the US lets you claim a foreign tax credit for the 25% US withholding, so you're not taxed twice on the same income.

Currency conversion

For tax calculations, convert both purchase and sale amounts to INR using the SBI TT Buying Rate on the respective transaction dates. The rupee-dollar movement can significantly affect your actual returns — and your taxable gains.

Foreign asset reporting

All Indian residents holding foreign assets must disclose them in Schedule FA of their ITR, regardless of whether any income was generated. Schedule FA follows the calendar year (January–December 2025 for AY 2026-27). Failing to disclose attracts penalties under the Black Money Act, though Budget 2026 raised the de minimis threshold to ₹20 lakh.

Step-by-step: Your first Nasdaq investment

Here's the practical process from start to finish:

Step 1: Choose your route. Decide between direct investment (more control, lower ongoing costs for larger amounts) or the Indian mutual fund route (simpler, no forex, lower minimum).

Step 2: Complete KYC. For direct platforms, you'll need your PAN, Aadhaar, passport, and a selfie. Most platforms complete digital KYC in under 10 minutes.

Step 3: Fund your account. For direct investment, initiate a wire transfer from your bank under LRS. Processing typically takes 1–3 business days. For Indian mutual funds, it's as simple as funding from your bank account or UPI.

Step 4: Start investing. For individual stocks, research specific companies and place buy orders. For passive exposure, buy a Nasdaq-100 tracking ETF (like QQQ in the US) or an Indian index fund. Fractional shares mean you don't need $200+ to buy a single share of a company like Apple — you can invest any amount starting from $1.

Step 5: Track and report. Monitor your portfolio, and at tax time, report holdings in Schedule FA and calculate capital gains with proper INR conversion.

Costs to watch out for

The headline brokerage fee isn't the only cost. Here's what actually eats into your returns:

For direct investment:

• Brokerage: $0 to $35 per trade, depending onthe platform
• Forex conversion: 0.5% to 1.5% (your bank's wire transfer margin — this is often the biggest hidden cost)
• Wire transfer fee: ₹500 to ₹1,500 per transfer (bank-dependent)
• TCS: 20% above ₹10 lakh (refundable)

For Indian mutual funds:

• Expense ratio: 0.20% to 0.60% annually
• Tracking error: 0.5% to 2.0% annually (the gap between the fund's return and the actual Nasdaq-100 return)
• Exit load: Some funds charge 1% if redeemed within 1 year

The direct route is generally cheaper for portfolios above ₹5–10 lakh. For smaller amounts and SIP-style investing, Indian mutual funds are more cost-effective.

Currency risk: The factor most investors forget

When you invest in US stocks, you're making 2 bets simultaneously: one on the stock's performance and one on the USD/INR exchange rate.

If the rupee weakens against the dollar (as it has historically, at roughly 3–4% per year on average), your returns are boosted when converted back to INR. If the rupee strengthens, your returns take a hit.

Over the long term, the rupee's gradual depreciation against the dollar has actually benefited Indian investors in US stocks. But in any given year, currency movements can add or subtract several percentage points from your returns. This is worth understanding before you invest — it's not a reason to avoid US stocks, but it is a reason to think in terms of years, not months.

Key takeaways
Indian investors have 4 routes to Nasdaq: direct international brokers, Indian mutual funds/ETFs, GIFT City, and Indian brokers with US partnerships. The LRS allows up to $250,000 per person annually, with 0% TCS on the first ₹10 lakh. LTCG on US stocks is now 12.5% flat (for holdings over 24 months), and the ₹1.25 lakh exemption doesn't apply to foreign stocks. The Nasdaq-100 has returned roughly 21% in 2025 and 16% annualised over 18 years, but past performance is no guarantee. Start with an amount you're comfortable with, understand the tax reporting requirements, and think long-term.