How to repatriate money from US brokerage accounts to India: the complete 2026 guide

The question most Indian investors ask after their US portfolio grows is: how do I actually get this money back? The mechanics sound straightforward — sell, wire, done — but the details matter. Which platform handles repatriation how? What FEMA rules apply? And critically: when exactly does the tax liability arise?

This guide covers all of it: the FEMA framework, platform-by-platform repatriation mechanics, the tax treatment of sales and dividends, and the documents you need to keep.

The most important thing to understand: the sale triggers tax, not the repatriation

Before anything else, fix this in your mental model.

When you sell US securities, you crystallize a capital gain or loss in the year of sale. That gain is taxable in India in that financial year — regardless of whether you move the cash to India at all.

You can sell in April 2025, leave the USD in your Vested or IBKR account until March 2026, and the capital gain is still reportable in your ITR for AY 2025-26. Repatriation — the act of moving money from your US brokerage account to your Indian bank account — is just a bank transfer. It is not a taxable event.

This matters because a lot of investors delay selling because they think repatriation is what triggers the tax. It is not. The trigger is the sale.

A related misconception: some investors think that keeping proceeds in a US brokerage avoids Indian tax scrutiny. It does not. Your worldwide income is taxable in India as a resident, and the brokerage account must be disclosed in Schedule FA regardless of whether you repatriate.

FEMA rules: what you are allowed to do

Outbound: LRS governs sending money out

When you originally sent money to your US brokerage, you did so under the Liberalised Remittance Scheme (LRS), which permits Indian residents to remit up to $250,000 per financial year for permitted capital account and current account purposes. US equity investment is a permitted LRS purpose.

Inbound: no cap on repatriation

FEMA and RBI rules treat inward remittances differently. There is no annual cap on bringing money back to India. You can repatriate the full proceeds of your US portfolio — principal, capital gains, dividends — in any amount, in any year, without any restriction on the inbound side.

The $250,000 LRS limit does not apply to inflows. It only governs how much you can send out each year.

The "reasonable period" guidance

Under FEMA, there is no mandatory repatriation requirement for capital invested under LRS. You are not obligated to bring money back on any particular timeline. However, RBI guidelines historically expected proceeds to be repatriated or reinvested within a "reasonable period." In practice:

• Indian brokerages (Vested, INDmoney, Dhan) operationalize this by requiring you to either invest or withdraw proceeds — idle cash balances in your brokerage account are not meant to sit indefinitely.
• IBKR and direct foreign brokerage accounts give you more flexibility, but extended idle balances in foreign accounts can attract scrutiny in an AIS/CRIU review.
• The safest posture: if you have sold and are not reinvesting, initiate repatriation within a reasonable window (commonly interpreted as within the same financial year or the next).

Repatriation is permitted capital account transaction

Bringing back proceeds of LRS investments is a fully permitted capital account transaction. It does not require RBI approval, does not consume LRS quota, and does not trigger TCS. (TCS applies only on outbound LRS remittances above the threshold, not on inbound repatriation.)

Platform-by-platform: how repatriation actually works

Vested (LRS route / DriveWealth)

Vested operates on the LRS route, with DriveWealth as the US broker and partner Indian banks handling the LRS remittance.

Process:

1. In the Vested app, navigate to your portfolio and initiate a withdrawal.
2. Vested converts USD to INR at the prevailing rate, with a markup of approximately 75–100 paise above the interbank rate.
3. The INR amount is transferred to your verified Indian bank account via domestic NEFT/RTGS — there is no SWIFT leg on the inbound side, since Vested's Indian entity handles conversion and pays you in INR domestically.
4. Timeline: 3–5 business days from withdrawal initiation.

Tax note: No US withholding tax applies to stock sale proceeds. Withholding applies only to dividends. The full USD proceeds (after any broker platform fees) are available for withdrawal.

FX note: The 75–100 paise markup on a $10,000 withdrawal works out to approximately ₹750–1,000. On larger amounts this compounds, so it is worth comparing against IBKR's near-interbank conversion if you are repatriating a significant sum.

INDmoney (GIFT City route)

INDmoney routes investments through its GIFT City (IFSC) entity, which changes the structural character of repatriation.

Process:

1. Initiate withdrawal in the INDmoney app.
2. Because the investment was made through a GIFT City entity rather than a direct LRS remittance, the proceeds come back as a domestic Indian transfer from INDmoney's IFSC entity.
3. Timeline: variable; INDmoney's customer support operates on India business hours.

Key distinction from LRS route: Because the money originated from an Indian GIFT City entity (not a direct outbound LRS wire), the structural repatriation is simpler — there is no inbound SWIFT wire to your Indian bank. The transfer is domestic.

Note: The FEMA and tax treatment of securities purchased through GIFT City IFSC entities is still evolving. The general principle — that sale triggers Indian capital gains tax — applies, but the specific documentation requirements and regulatory characterization are less settled than the LRS route.

Dhan (GIFT City route via Raise IFSC)

Dhan launched its US stocks product in June 2026 through Raise IFSC, its GIFT City entity. This is a very new product.

Process:

1. Withdraw via the Dhan app.
2. Proceeds flow from Raise IFSC (a domestic Indian entity operating out of GIFT City) to your Indian bank account — this is structurally a domestic transfer.
3. Timeline: likely 1–3 business days, given the domestic transfer structure.

Important caveat: As of mid-2026, Dhan's US stocks product is new and repatriation at scale has not been tested. If you are planning a large withdrawal, verify the current process directly with Dhan before initiating.

IBKR (Interactive Brokers) and Paasa

IBKR is the most flexible platform for repatriation, and typically offers the best FX rates.

Process:

1. Sell your US securities within IBKR. Proceeds settle in USD in your IBKR account.
2. If you hold positions in multiple currencies, convert to USD within IBKR using the Forex trading feature. IBKR's FX conversion is near-interbank — often 1–5 paise markup, significantly better than Indian bank inbound conversion rates.
3. Initiate a withdrawal from IBKR Account Management → Funding → Withdraw. Select your pre-verified Indian bank account.
4. IBKR sends a SWIFT wire in USD to your Indian bank.
5. Your Indian bank receives the USD and converts to INR at their TT-buying rate.
6. Timeline: 3–5 business days from withdrawal initiation (SWIFT routing + Indian bank processing).

Purpose codes for your Indian bank: When the inbound wire arrives, your Indian bank may ask you to specify a purpose code under FEMA for the inbound remittance:

• P0006 — Repatriation of investment income (for dividends, interest)
• P0008 — Repatriation of capital (for sale proceeds)

Your bank's forex desk or NRI banking team can help classify the specific purpose.

Documentation your bank may request:

• IBKR account statement showing the sale proceeds
• Original A2 form (the outbound LRS remittance confirmation) showing the money went out legally
• Sometimes: a letter explaining the nature of the inward remittance

Paasa, which offers IBKR access specifically targeted at Indian investors, uses the same IBKR infrastructure for withdrawals — the process above applies.

FX comparison: Because IBKR converts USD at near-interbank rates before the wire (or your Indian bank converts at their inbound TT-buying rate), the overall FX cost via IBKR is typically lower than Indian platform routes. On a $50,000 repatriation, the difference between a 75-paise Vested markup and a 10-paise IBKR conversion can be ₹30,000–40,000.

The GIFT City route: structurally simpler, legally still evolving

INDmoney and Dhan's GIFT City route has one structural advantage over the LRS route: because the investment flows through an Indian entity operating in GIFT City (an International Financial Services Centre within India), the return of proceeds is treated as a domestic transfer — money flows from one Indian entity (the IFSC broker) to another Indian account (your bank), without a cross-border SWIFT wire.

This means:

• No inbound purpose codes to specify.
• No correspondent bank delays.
• No Indian bank's inbound forex desk involved.
• Simpler operationally.

However, the FEMA and tax analysis of how proceeds from US securities purchased, held, and sold within a GIFT City entity should be treated is still evolving. The tax treatment of capital gains (Indian capital gains tax applies on your sale, computed in INR) is broadly the same in principle. But specific questions — how the INR cost basis should be tracked for GIFT City route purchases, whether Form 67 for dividend withholding credit works identically, and how Schedule FA disclosure should reflect GIFT City-route holdings — are areas where guidance is limited as of mid-2026.

If you are invested on the GIFT City route and repatriating a meaningful amount, speak with a CA familiar with FEMA and IFSC regulations before filing.

Tax on the sale — not the repatriation

Capital gains are an INR computation

Capital gains on US stock sales are computed in Indian rupees, not USD. The gain in USD is irrelevant for Indian tax purposes. What matters is:

Capital gain (INR) = (Sale proceeds in USD × SBI TT Buying Rate on sale date) − (Cost basis in USD × SBI TT Buying Rate on purchase date)

Use the SBI TT Buying Reference Rate (TTBR) published by SBI on the relevant date. The FBIL reference rate is also acceptable. The rate on the actual date of the transaction — not the date you receive INR in your bank account — is what applies.

STCG vs LTCG: the 24-month threshold

Holding period	Tax treatment	Rate
Less than 24 months	Short-term capital gain (STCG)	Slab rate (typically 30% + cess for most equity-comp earners)
24 months or more	Long-term capital gain (LTCG)	12.5% flat, no indexation

Budget 2024 change: Prior to July 23, 2024, LTCG on foreign securities was taxed at 20% with indexation. The Finance (No. 2) Act, 2024 changed this to 12.5% without indexation, effective for transfers on or after July 23, 2024. If you sold before that date, the old 20%-with-indexation treatment applies for those specific lots.

The 24-month threshold for US stocks is different from Indian listed equity (where the LTCG threshold is 12 months). Do not conflate the two. US stocks are foreign securities under Section 112, not domestic equity under Section 111A or 112A.

Indexation is gone

Under the post-Budget 2024 rules, there is no indexation benefit for LTCG on foreign securities. The gain is the raw INR sale proceeds minus the raw INR cost basis at purchase. The 12.5% rate applies to this unadjusted gain.

Tax arises in the year of sale

You owe advance tax on capital gains in the year of sale. If your net tax liability exceeds ₹10,000 after TDS/TCS offsets, advance tax instalments apply. Missing advance tax leads to interest under Sections 234B and 234C. Plan accordingly if you are selling large positions — do not wait until ITR filing to settle the tax.

Currency translation matters more than people realize

A stock bought at $100 when USD/INR was ₹75, sold at $110 when USD/INR was ₹96:

• INR cost basis: $100 × ₹75 = ₹7,500
• INR sale proceeds: $110 × ₹96 = ₹10,560
• INR capital gain: ₹3,060
• Gain in USD terms: $10 (10%)
• Gain in INR terms: ₹3,060 / ₹7,500 = 40.8%

The rupee depreciation amplified the gain significantly in INR terms. This also means your Indian tax bill on US stock gains tends to be higher relative to what the USD return alone would suggest — the currency tailwind that benefits you as an investor also increases your INR-denominated taxable gain.

Dividend repatriation: US withholding, Form 67, and FTC

How dividends flow

When a US-listed company pays a dividend to an Indian resident investor:

1. The gross dividend is declared (say, $100).
2. The US withholds tax at the India-US DTAA rate of 25% (assuming a valid W-8BEN is on file with your broker; without it, the default withholding is 30% and the extra 5% is unrecoverable).
3. You receive $75 in your brokerage account.
4. The withheld $25 is reported on Form 1042-S, which your US broker issues.

You do not need to separately initiate repatriation for dividends — they accumulate as cash in your brokerage account and can be repatriated at any time along with sale proceeds.

Indian tax treatment of dividends

In India, foreign dividends are taxable as Income from Other Sources under Section 56, at your applicable slab rate. For most equity-comp earners, this is 30%.

The good news: you can claim the US withholding tax (25%) as a Foreign Tax Credit (FTC) against your Indian tax liability, via Form 67 (or Form 44 in some ITR filings — the exact form depends on the AY; verify for AY 2026-27). This prevents double taxation.

The FTC mechanism works as follows:

• Gross dividend in INR: gross USD dividend × SBI TTBR on dividend record date.
• Indian tax liability: gross INR dividend × slab rate.
• FTC available: US tax withheld in INR (25% of gross dividend × TTBR on the withholding date).
• Net Indian tax payable: Indian liability minus FTC (to the extent of Indian tax on that income — you cannot claim FTC in excess of the Indian tax on the same income).

Form 67 is mandatory — and must be filed on time

To claim the FTC, you must file Form 67 before the due date of your ITR (July 31 for non-audit cases). Form 67 cannot be filed after the ITR due date; a belated FTC claim is not permitted. This is a frequently missed deadline that results in paying full Indian slab tax on dividends without getting credit for the US withholding.

If you received dividends on multiple stocks across the year, Form 67 needs an entry for each dividend-paying security. Your broker's Form 1042-S is the source document.

Documents to keep

Keep these documents permanently — at minimum until 6 years after the relevant ITR assessment year, but ideally indefinitely for positions still held:

For demonstrating the money went out legally:

• A2 form for each outward LRS remittance (issued by your bank when you sent money abroad).
• LRS remittance confirmation from your bank.
• These prove that the capital was remitted legally under LRS — critical if your Indian bank questions the source of an inbound wire.

For capital gains computation:

• Brokerage account statements showing purchase dates, purchase prices in USD, and sale prices in USD.
• IBKR or DriveWealth tax statements showing per-lot cost basis and sale proceeds.
• SBI TT Buying Rate records for each purchase and sale date (take a screenshot from the SBI website or FBIL on each transaction date and save it).

For dividend FTC claims:

• Form 1042-S from your US broker (issued annually, covers all dividends paid and withheld in the calendar year).
• This is the source document for Form 67.

For inbound wire purpose code documentation (IBKR users):

• IBKR account statement showing the withdrawal and the corresponding sale proceeds.
• A brief note or letter describing the nature of the inward remittance (sale of US securities originally purchased under LRS).

For Schedule FA:

• Year-end (December 31) portfolio valuation from your US broker.
• If you closed the account mid-year, the closing statement.

Common mistakes

Not tracking INR cost basis at the time of purchase

The single most common error. Many investors know their USD cost basis but have never recorded the SBI TTBR rate on the purchase date. Without this, computing LTCG accurately is impossible. Reconstruct it now using historical SBI TTBR data if you have not tracked it — the data is publicly available. Going forward, record it on every purchase.

Thinking repatriation is the taxable event

Already addressed above, but worth repeating: the sale is the taxable event. Many investors delay repatriation thinking it defers their tax — it does not. Worse, delaying can cause them to miss advance tax deadlines, triggering interest under Sections 234B and 234C.

Not filing Form 67 for dividend withholding

Form 67 must be filed before the ITR due date. It cannot be filed late. If you miss it, you lose the foreign tax credit and end up paying both the 25% US withholding and Indian slab tax on the same dividend. Given that most US ETFs and dividend-paying stocks pay dividends quarterly, this adds up.

Confusing STCG/LTCG thresholds (24 months, not 12)

The LTCG threshold for US stocks (foreign securities under Section 112) is 24 months. The 12-month threshold applies to Indian-listed equity under Section 111A / 112A. Selling US stock at month 13, thinking it qualifies for LTCG, results in slab-rate tax instead of 12.5%. Verify holding period per lot before selling.

Not filing Schedule FA even after repatriation

Schedule FA requires disclosure of foreign financial accounts held at any point during the year (January 1 to December 31). If you held a US brokerage account during the year — even if you repatriated everything and closed the account before March 31 — you may still need to disclose it in Schedule FA for that assessment year. Non-disclosure of foreign assets is a serious compliance risk under the Black Money Act. When in doubt, disclose.

Letting bank ask about the inbound wire catch you off-guard

If you are using IBKR and receiving a SWIFT wire, your Indian bank may flag the inbound transfer and ask for documentation of the source of funds. This is routine — but investors who have not kept their A2 forms and brokerage statements are unprepared for it. Keep these documents readily accessible, not buried in an email from 2021.

---

Vested.blog is the editorial publication of Rovia.