Dhan launched US stocks via GIFT City: what it means and how it differs from a regular US brokerage account

The June 2026 change that matters for Indian investors

In June 2026, Dhan became the first mainstream Indian retail platform to offer US stock investing through GIFT City's IFSC route. The GIFT City route is still an LRS-compliant framework — the $250,000 annual LRS limit applies, and TCS is collected at standard rates (0% up to ₹10L/year, 20% above). What IS different is the operational mechanics: your money moves via a domestic NEFT/IMPS transfer rather than SWIFT, there is no Form A2 or 15CA/15CB documentation required for the transfer itself, and the regulatory framework is IFSCA rather than the standard overseas investment path.

If the Section 10(4D) capital gains exemption holds for your situation — which requires CA verification — there may be a genuine tax advantage on gains. This article explains what GIFT City actually is, how Dhan's product works mechanically, what the genuine advantages are, and what the real caveats are.

What GIFT City is — and why it exists

Gujarat International Finance Tec-City (GIFT City) is a special economic zone on the outskirts of Gandhinagar, Gujarat. The Indian government created it to bring financial services activity back to India that was migrating to Singapore, Dubai, and Mauritius due to their more flexible regulatory frameworks.

GIFT City's financial district — the International Financial Services Centre (IFSC) — is regulated by the International Financial Services Centres Authority (IFSCA), a unified regulator created in 2020 that oversees all financial services within GIFT City. IFSCA sits separate from the RBI, SEBI, IRDAI, and PFRDA — it has jurisdiction over banking, securities, insurance, and fund management activity within the IFSC.

Entities set up in GIFT City IFSC are legally incorporated in India but operate under IFSCA's regulatory framework rather than the domestic Indian framework. They transact in foreign currency. They are designed to compete with offshore centres, which means the regulatory perimeter around them is different in important ways.

For investors, the key consequence is that money sent to an IFSCA-regulated GIFT City entity is not classified as a foreign remittance under FEMA (Foreign Exchange Management Act). It is a transfer within India — just to a special-purpose domestic zone.

The two routes for US stock investing from India

Understanding the GIFT City advantage requires understanding the standard LRS route first.

Route 1: LRS (the standard route used by Vested, INDmoney, Tickertape)

Under LRS, your Indian bank account sends a foreign remittance — your money crosses India's borders and arrives at a US or foreign entity. FEMA classifies this as an overseas investment.

Consequences:

• $250,000 annual cap: You can remit a maximum of $250,000 per financial year for LRS purposes (shared across all LRS categories — education, travel, overseas investment, etc.)
• TCS collection: Your bank collects TCS at 0% on the first ₹10L invested, 20% on the amount above ₹10L (reclaimable at ITR but capital is blocked)
• Schedule FA disclosure: The foreign account must be disclosed as a foreign financial asset in your ITR
• FEMA compliance: Standard overseas investment FEMA guidelines apply

Route 2: GIFT City IFSC (Dhan's route via Raise IFSC Pvt. Ltd.)

Under GIFT City, your money goes to Raise IFSC Pvt. Ltd. — Dhan's IFSCA-regulated GIFT City subsidiary. This is a transfer to a domestic Indian entity, not a foreign remittance.

Consequences:

• LRS cap: The $250,000 annual LRS limit applies — the GIFT City route is an LRS-compliant remittance and counts against your annual cap
• TCS: TCS applies at standard rates — 0% up to ₹10L/year, 20% above — the same as any LRS investment remittance
• Transfer mechanics: Domestic NEFT/IMPS transfer instead of SWIFT — faster (same day vs 2–5 business days), no SWIFT fees, no Form A2/15CA/15CB required for the transfer itself
• Schedule FA: Status evolving — see below
• Section 10(4D) potential: IFSC-qualifying securities may attract capital gains exemption

How Dhan's GIFT City route differs operationally

While TCS and the LRS cap apply equally to the GIFT City route, the operational process is meaningfully different from standard LRS investing.

Funding a Dhan GIFT City account:

• Domestic NEFT/IMPS transfer from your Indian bank to Raise IFSC Pvt. Ltd. — no SWIFT required
• No Form A2 declaration for the transfer itself
• No Form 15CA/15CB required (these are typically required for foreign remittances above certain thresholds)
• Same-day settlement in most cases, versus 2–5 business days for SWIFT-based LRS transfers

Note: TCS is still collected at the time of remittance — your bank will collect 0% on the first ₹10L/year and 20% above that threshold, as with any LRS investment. The LRS cap of $250,000/year applies equally. The advantage of the GIFT City route is operational efficiency, not TCS elimination.

Section 10(4D) — the potential capital gains exemption

The Income Tax Act's Section 10(4D) provides an exemption on income arising from the transfer of securities listed on IFSC exchanges, subject to conditions. The provision was introduced to attract global financial activity to GIFT City.

Whether US-listed stocks accessed via Dhan's Raise IFSC entity qualify for this exemption is not a simple yes or no. It depends on:

• How the securities are legally structured within the IFSC entity
• Whether the relevant conditions under Section 10(4D) and associated rules are met
• CBDT guidance and circulars issued on IFSC investments (which continue to evolve)

If it applies: Capital gains on qualifying IFSC securities could be fully exempt from Indian income tax. For an investor realising ₹10L in gains, that is potentially ₹1.25L saved (at LTCG rate of 12.5%) to ₹3L saved (at a 30% STCG slab rate).

If it does not apply in your case: You are taxed identically to any other foreign equity investment — STCG at slab (≤24 months), LTCG at 12.5% (>24 months).

The potential upside is real. The uncertainty is also real. Consult a CA who specialises in IFSC taxation before assuming Section 10(4D) applies to your Dhan GIFT City investments. Do not make large investment decisions based on an assumed tax exemption you have not verified.

Schedule FA — the evolving compliance question

Schedule FA requires Indian residents to disclose foreign financial assets. The core question for Dhan GIFT City investors: are holdings at Raise IFSC (a domestic Indian entity) considered "foreign" assets?

The argument that they are not: Raise IFSC is incorporated in India, regulated by IFSCA (an Indian authority), and your transfer to it is not a foreign remittance. The assets are, in a structural sense, "Indian."

The argument for caution: the underlying securities are US-listed stocks. The economic exposure is to foreign assets. Income tax law and FEMA definitions do not always move in lockstep.

IFSCA regulations and income tax guidance on GIFT City are relatively new and continue to be developed. The prudent position until there is explicit clear guidance: disclose in Schedule FA, and consult your CA. The cost of over-disclosure is minimal. The cost of under-disclosure, if the tax authority takes a different view, could be significant.

How Dhan's product works in practice

The entity structure

• Dhan (the app and Indian entity you interact with): well-known for options trading and Indian equity; launched US stocks in June 2026
• Raise IFSC Pvt. Ltd.: Dhan's IFSCA-regulated GIFT City subsidiary that holds your US securities
• ViewTrade International: the IFSC-side clearing and execution partner (IFSCA-registered as a Global Access Partner)

What you can buy

• NYSE and NASDAQ listed stocks and ETFs
• Fractional shares (buy less than one full share)
• US stock SIPs — recurring investment instructions, e.g., ₹5,000 per week into SPY

Fees

• Brokerage: 0.25% per trade (same as Vested Basic and INDmoney; Vested Premium is 0.15% for ₹4,500/yr)
• No account opening fee
• No annual maintenance fee
• No withdrawal fee
• FX conversion handling: part of the Raise IFSC/ViewTrade infrastructure; verify current FX markup directly with Dhan before investing large amounts

The Dhan UX advantage

Dhan has a large existing user base from its Indian equity and derivatives trading. If you already use Dhan for Nifty options or Indian stock trading, the US stocks feature integrates into the same app you already have on your phone. One portfolio view. One app for both markets. This seamless integration is a genuine quality-of-life advantage over platforms that require a separate app for US stocks.

Launched June 2026 — what "very new" means for investors

Dhan's US stocks via GIFT City launched in June 2026. At the time of this writing, the product has been live for weeks, not years.

This matters for several reasons:

Track record: There is essentially none yet. Platform reliability, repatriation speed, customer support quality under stress, and dispute resolution processes have not been tested at scale.

Regulatory evolution: IFSCA's regulatory framework for retail investors in GIFT City IFSC is still being refined. Rules around repatriation, reporting, and investor protection for IFSC investments may change.

Edge cases: What happens if there is a dispute about a trade execution? How is a foreign account transfer from ViewTrade International handled if there is a mismatch? These operational questions get answered over time. For early adopters, there is inherently less certainty.

None of this means Dhan's GIFT City product will fail — Dhan is a well-funded, legitimate company and GIFT City is a serious regulatory initiative. But early-adopter risk is real, and investors should size their initial allocation accordingly.

What Dhan does NOT do

• No ACATS inbound (cannot move existing US stock holdings from another broker)
• No RSU consolidation or equity grant management
• No options or futures on US securities
• No OTC or pink-sheet stocks
• No London-listed ETFs for US estate tax mitigation
• No Schedule FA helper tool (you handle compliance yourself or via CA)

Who should use Dhan's GIFT City route

Best for:

• Investors who already use Dhan for Indian equity/derivatives and want a unified app experience
• Investors who want a simpler, faster domestic NEFT/IMPS transfer process without SWIFT documentation
• Investors willing to explore the potential Section 10(4D) capital gains advantage (with CA guidance)
• Early adopters comfortable with a very new product in a relatively new regulatory framework

Look elsewhere if:

• You are investing ₹5–10L/year in US stocks (the TCS impact is manageable and the newness risk may not be worth it)
• You need a proven multi-year track record on your US investing platform
• You need RSU consolidation → Rovia
• You need the most extensive research tooling → Tickertape
• You need options or global market access → IBKR

How GIFT City compares to the standard LRS platforms

Dhan's GIFT City route offers operational advantages — domestic transfer, no SWIFT, no A2/15CA/15CB documentation — and the potential Section 10(4D) capital gains exemption (verify with CA). TCS and the $250,000 LRS cap apply equally to both routes.

For investors who want the simplest possible transfer process and are already Dhan users, the GIFT City route reduces friction meaningfully. For investors focused primarily on TCS or LRS cap headroom, the GIFT City route offers no advantage on those dimensions over standard LRS platforms (Vested, INDmoney, Tickertape).

The full platform comparison for 2026 covers where each platform makes sense by investment size and needs. Whether other platforms follow Dhan into GIFT City will be one of the more interesting developments to watch in Indian retail investing over the next 12–24 months.

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Vested.blog is the editorial publication of Rovia.

Opening a Dhan GIFT City account: step by step

For investors ready to try the GIFT City route, here is how account opening works:

1. Download or open the Dhan app — the US stocks via GIFT City feature is integrated into the same app used for Indian equity trading
2. Complete KYC if not already done: PAN card, Aadhaar number, a selfie, and bank account linkage (same KYC as Dhan's Indian equity platform)
3. Navigate to the US Stocks section within the app and select "Invest via GIFT City"
4. Activate the Raise IFSC Pvt. Ltd. account — Raise IFSC is a separate legal entity from the Indian Dhan entity; you are onboarded to it through the same app flow
5. Fund via UPI or NEFT from your Indian bank account in INR — ViewTrade International handles FX conversion and custody at the GIFT City end
6. TCS is collected at funding — your bank collects 0% on the first ₹10L per financial year and 20% above that, the same as standard LRS

Documents required: PAN (mandatory), Aadhaar (for e-KYC). No Form A2, no Form 15CA, no Form 15CB required for the transfer itself.

Stock universe: what you can buy

Dhan's GIFT City platform launched with approximately 50–100 large-cap US stocks from NYSE and NASDAQ, plus select US-listed ETFs. The initial universe includes:

• Large-cap tech: Apple (AAPL), NVIDIA (NVDA), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG/GOOGL), Meta (META)
• Other major equities: Tesla (TSLA), Berkshire Hathaway (BRK.B), JPMorgan (JPM), Visa (V)
• US ETFs: SPY (S&P 500), QQQ (Nasdaq 100), and select sector ETFs

Fractional shares are supported — you can buy 0.05 shares of NVDA or any other stock. The stock universe is more limited than full LRS platforms (Rovia, Vested, INDmoney) which offer the entire US market. Dhan GIFT City is expected to expand its stock list as the platform matures.

Minimum investment: No enforced minimum per trade beyond fractional share mechanics.

Fee structure

Fee type	Amount
Brokerage	0.25% per trade
Account opening	Nil
Annual maintenance	Nil
Withdrawal fee	Nil
FX conversion spread	Built into ViewTrade's FX rate — verify current rate in the app

The 0.25% brokerage is in line with Vested Basic and INDmoney. For larger volume, Vested Premium at 0.15% (₹4,500/year) is cheaper above a certain trade size.

Tax treatment under IFSC regulations

Under standard LRS investing, capital gains from US stocks are taxed in India at STCG (slab rate, < 24 months) or LTCG (12.5%, ≥ 24 months).

For GIFT City IFSC investments, Section 10(4D) of the Income Tax Act potentially provides an exemption on income from the transfer of specified securities listed on IFSC exchanges. If this applies, the effective capital gains tax could be significantly lower — potentially 10% flat or even zero, depending on the specific structure.

The caveat that matters: Whether Section 10(4D) applies to retail investors buying US-listed stocks via Raise IFSC requires CA verification specific to how Dhan has structured the product. Do not assume this exemption applies before verifying with a CA who specialises in IFSC taxation.

Schedule FA treatment for GIFT City holdings

For standard LRS holdings, Schedule FA (Table A2) lists the foreign custodian details — e.g., Alpaca Securities LLC for Rovia, or E*TRADE Securities LLC for Morgan Stanley at Work.

For Dhan GIFT City holdings, the treatment is unsettled. Raise IFSC Pvt. Ltd. is an Indian-incorporated entity. The argument is that holdings there are not "foreign" assets. If they are classified as domestic, no Schedule FA disclosure is needed. If classified as foreign (because the underlying securities are US-listed), Table A2 disclosure would apply — potentially with NSE IFSC (NSE-IX) as the custodian entity, country code India.

Until CBDT issues clear guidance, the conservative approach is to disclose in Schedule FA (with your CA's guidance on which entity and country code to use). Over-disclosure carries no penalty.

US estate tax position

Indian residents holding US-listed stocks directly via LRS face US estate tax exposure — 40% on US-situs assets above the $60,000 NRA exemption. The GIFT City structure may reduce this exposure: since Raise IFSC is an Indian entity, an Indian investor's holding is a claim on an Indian entity rather than direct ownership of US-situs shares. This structural layer may mean the US estate tax does not apply to the Indian investor's share of the portfolio.

However, this analysis is untested and requires a US tax attorney's opinion before concluding the estate tax is eliminated. Do not assume the GIFT City route removes US estate tax exposure without professional advice.

When the Dhan GIFT City route beats standard LRS

The GIFT City route wins on:

1. Simpler funding: Domestic NEFT/IMPS, no SWIFT, no Form A2 paperwork, same-day settlement
2. Unified app: If you already use Dhan for Indian F&O or equity, one portfolio view, one app
3. Potential Section 10(4D) benefit: Significant tax saving if confirmed applicable by CA

The GIFT City route does not win on TCS (same rates) or LRS headroom (same $250,000 cap). For investors whose primary concern is those two dimensions, there is no advantage over standard LRS platforms.