IBKR direct vs Paasa: which one is right for serious Indian investors?

If you are a serious Indian investor looking at US markets beyond a simple S&P 500 ETF — you want options, individual stocks across global exchanges, futures, or simply the best possible FX rate on remittances — you have almost certainly landed on Interactive Brokers as the broker of choice. IBKR's FX rates are near-interbank, it offers access to 80+ exchanges worldwide, and its fee structure rewards investors who know what they are doing.

The question that comes next is how to access IBKR. Two paths exist for Indian residents:

1. Open an account directly at interactivebrokers.com.
2. Open through Paasa, an India-facing compliance layer that sits on top of IBKR.

Both paths give you the same underlying broker. The difference is entirely about who handles the compliance work that Indian law requires of you — and whether outsourcing that work is worth the fee.

This article walks through that trade-off in detail.

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Same underlying broker, different compliance experience

It is worth stating clearly at the outset: Paasa is not a brokerage. When you open an account through Paasa, your account is at Interactive Brokers — in your name, under your PAN, with full SIPC protection. Paasa adds an India-facing compliance and support layer on top of that account. It does not hold your assets, it does not custody your securities, and it does not sit between you and IBKR for settlement purposes.

This means the core brokerage question — "Is Interactive Brokers a good broker?" — is identical in both cases. You are asking only about whether Paasa's compliance layer is worth its cost.

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What Interactive Brokers gives you — the same for both paths

Before comparing the two access paths, it is useful to understand exactly what IBKR provides, because it is the same for Paasa users and direct users alike.

Near-interbank FX conversion

IBKR's currency conversion is one of the most significant advantages it holds over Indian-facing platforms. The conversion fee is approximately 0.002% with a $2 minimum — this is as close to the interbank rate as retail investors can get. Compare this to the 1.5–3% implicit spread embedded in the FX conversion at most Indian brokerages offering US stock access, and the difference compounds meaningfully on large remittances.

Paasa preserves this FX advantage. You are still converting at IBKR's rates, not at a retail bank spread.

80+ global exchanges

IBKR's exchange access is genuinely global: US (NYSE, NASDAQ, CBOE), London, Hong Kong, Tokyo, Singapore, Euronext, and dozens more. If you want to buy Japanese equities directly, hold London-listed ETFs, or trade Singapore-listed REITs, IBKR is one of the few retail platforms that makes this possible.

Options, futures, and complex instruments

IBKR supports options and futures on global markets with professional-grade tools. For Indian investors who want to hedge US equity positions, express a view using options, or trade commodity futures, this is substantive access that the Indian-facing US-stock platforms (Vested, INDmoney, and similar) simply do not offer.

SIPC protection

Both direct IBKR accounts and Paasa-accessed IBKR accounts carry SIPC coverage up to $500,000 (including up to $250,000 for cash). IBKR is also a FINRA member. The regulatory standing is identical regardless of access path.

Schedule FA disclosure requirement

One thing that is the same regardless of access path: your IBKR account is a foreign financial account, and you are required to disclose it under Schedule FA of your Indian ITR. This requirement does not go away with Paasa. The difference is in how much help you get filling it out.

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The compliance gap: what IBKR does not do for Indian residents

IBKR is an American broker built for US regulatory compliance. It produces US-format tax documents. For an Indian resident investor, this creates a gap between what IBKR provides and what the Indian Income Tax Department requires.

Tax documents are US-format only

IBKR will provide you with a Form 1099-B equivalent — a statement of your transactions in USD, with cost basis and proceeds denominated in dollars, classified by US holding-period rules (one-year threshold for long-term vs. short-term).

For your Indian ITR, you need:

• INR cost basis and INR proceeds, converted using SBI TT rates on the dates of acquisition and sale respectively.
• Capital gains classified under Indian rules (24-month threshold for listed foreign securities, not the US 12-month rule).
• Schedule FA disclosures showing peak value, year-end value, and income credited — all in INR.

IBKR produces none of this. If you file your own ITR or work with a CA, you or your CA must manually pull IBKR statements, identify each transaction, source the SBI TT rate for each date, and reconstruct the gain/loss in INR. For a portfolio with 10–20 annual transactions, this is a few hours of careful work. For a portfolio with 100+ transactions, including options exercises and partial closes, it becomes a significant project.

Schedule FA values require manual extraction

Schedule FA requires you to disclose foreign financial accounts — including the peak balance during the year, the closing balance, and any income credited. IBKR's account statements contain all this data, but in USD, across multiple statement types (daily activity, annual summary, trade confirmations). Pulling the peak-balance figure correctly — it is the highest daily account value during the year — requires either exporting a full year of daily statements or doing a careful manual review.

FEMA and LRS compliance: you are on your own

When you remit money from India to fund your IBKR account, you are using the Liberalised Remittance Scheme. The remittance must be correctly purpose-coded (typically code S0001 for investment in equities abroad), and your bank will ask for documentation. IBKR has no India-facing team to help you navigate this. The responsibility sits with you and your bank.

Similarly, if FEMA questions arise — about the nature of the investment, the permissibility of a specific instrument, or repatriation of proceeds — IBKR customer support operates on US business hours and is not equipped to answer Indian regulatory questions.

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What Paasa adds

Paasa's value proposition is a direct response to the compliance gap described above.

Pre-filled Indian tax documents in ITR format

The primary feature is ITR-ready tax output. Paasa translates your IBKR transaction data into the format required for Indian filing: INR cost basis, INR proceeds at SBI TT rates, gains classified by Indian holding-period rules, and Schedule FA values pre-computed. This is not a minor convenience — for investors without a CA experienced in US stock ITR compliance, it is the difference between filing correctly and filing incorrectly.

Schedule FA pre-filled

The Schedule FA values — peak balance, year-end balance, income credited — are computed and provided by Paasa. You still file the Schedule FA (you are the taxpayer, not Paasa), but the numbers are given to you in the right format rather than requiring you to reconstruct them from IBKR statements.

FEMA and LRS compliance support

Paasa provides guidance on purpose codes, helps with documentation for LRS remittances, and can answer FEMA-related questions in the context of IBKR account funding and repatriation. India-hours customer support in English and Hindi means these questions can be resolved during Indian business hours without navigating US time zone friction.

Same asset universe, same SIPC protection

Paasa does not restrict your access to IBKR's instruments. You retain full access to options, futures, 80+ exchanges, and the full security universe. The SIPC protection is unchanged. The FX rate advantage is preserved.

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Fee comparison

	IBKR Direct (Fixed plan)	IBKR Direct (Tiered plan)	Paasa Access	Paasa Apex
US equities	$0.005/share, min $1/order	$0.0035/share, min $0.35/order	Small markup above IBKR rates	IBKR published rates, no per-trade markup
Monthly/AUM fee	None	None	None	AUM-based, tiering down as portfolio grows
FX conversion	~0.002%, $2 min	~0.002%, $2 min	IBKR rates preserved	IBKR rates preserved
ITR/Schedule FA output	None — manual work	None — manual work	Included	Included
FEMA/LRS support	None	None	Included	Included + dedicated relationship manager
Customer support	US hours, not India-specific	US hours, not India-specific	India hours, English and Hindi	India hours + dedicated relationship manager
SIPC coverage	Up to $500k	Up to $500k	Up to $500k	Up to $500k

A note on IBKR's Tiered plan: IBKR defaults new accounts to the Fixed plan ($0.005/share, $1 minimum). The Tiered plan ($0.0035/share, $0.35 minimum) must be actively selected. For active traders, the Tiered plan is meaningfully cheaper per share — but you need to opt in.

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Break-even analysis: when is Paasa worth it?

This is the core question, and the answer depends on two variables: how active you are, and what you would pay for equivalent compliance work if you did it yourself.

The cost of DIY compliance

If you use a CA for your ITR, the marginal cost of adding US equity Schedule FA compliance is typically in the range of Rs 5,000–15,000 per year, depending on the CA's experience level and the complexity of your portfolio. CAs who are experienced in US stock ITR work will be at the higher end of that range but will produce more accurate output. CAs who are not experienced may charge less but may also miss nuances — INR conversion methodology, lot selection, the distinction between Schedule FA and Schedule FSI — that create compliance risk.

If you do the compliance work yourself, the cost is time: typically several hours per year for a moderate portfolio, and meaningfully more for high-transaction or complex portfolios (options exercises, partial closes, multiple currencies).

Paasa Access plan: per-trade markup

Paasa's Access plan charges a small markup on US trade commissions above IBKR's published rates, with no monthly fee and no AUM charge. This plan makes sense if your portfolio is mid-sized and you do not trade very actively. The annual markup cost on a portfolio with 10–20 annual transactions is likely less than the CA cost for equivalent compliance work. The compliance and support are included.

For very active traders — those executing 100+ trades per year — the cumulative markup on the Access plan will exceed the CA cost. At that volume, IBKR direct on the Tiered plan plus a good CA is likely cheaper.

Paasa Apex plan: AUM-based fee

The Apex plan passes through IBKR's published rates with no per-trade markup and charges an AUM-based fee that tiers down as the portfolio grows. It includes a dedicated relationship manager for tax and FEMA queries.

The Apex plan is designed for larger portfolios where the per-trade markup of the Access plan would become significant, but where the value of a relationship manager — for complex situations like RSU plus direct US equity, multiple foreign accounts, options positions, or FEMA repatriation — justifies a fee on AUM.

At a portfolio size where a good tax advisory relationship with a US-equity-experienced CA would cost Rs 15,000–30,000 per year or more, the Apex plan's AUM fee is worth evaluating on a net basis against that alternative.

The non-financial factor: compliance accuracy

The break-even math above treats compliance as a cost. There is a second dimension: accuracy. An incorrectly filed Schedule FA, an incorrect INR conversion, or a misclassified capital gain can create problems that are expensive to fix — revised returns, penalty interest, and the risk of notices. For investors whose IBKR portfolio is their primary non-employment financial asset, the value of getting the ITR right the first time is real and not fully captured in the CA fee comparison.

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Decision framework

Ask yourself three questions:

1. How many transactions do you make per year?

• Under 30 transactions: Paasa Access plan is likely cheaper than CA-equivalent compliance work, and simpler.
• 30–100 transactions: the Access plan markup and CA cost are roughly comparable. Evaluate on support and accuracy preference.
• Over 100 transactions: IBKR direct on the Tiered plan plus a CA is likely cheaper on fees. The decision becomes whether you value Paasa's compliance output quality and support over the fee saving.

2. Do you already have a CA experienced in US stock ITR compliance?

• Yes, and they produce correct Schedule FA output: IBKR direct is viable. The CA cost is already sunk.
• No, or you are uncertain of their US equity experience: Paasa's compliance layer removes a meaningful accuracy risk.

3. How complex is your situation?

• Simple: US equities only, regular purchases and occasional sales. IBKR direct is manageable.
• Complex: Options positions, multiple foreign accounts, RSU income plus direct equity, repatriation questions, multiple tax years to catch up on. Paasa Apex with a dedicated relationship manager removes compounding complexity.

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Who should use each — and who should use neither

Use IBKR direct if:

• You are a sophisticated investor comfortable navigating US tax forms and performing INR conversion manually or through a trusted CA with US equity experience.
• You are an active trader executing 100+ trades per year, where Paasa's per-trade markup would be material.
• You already have a CA relationship that handles US equity ITR work correctly, and the CA cost is already incorporated into your financial planning.

Use Paasa if:

• You want IBKR's full asset universe and FX quality but do not want to manage the compliance translation yourself.
• You do not have a CA with verified experience in US equity Schedule FA and ITR filing.
• Your portfolio is Rs 50 lakh or larger and you value India-hours support for FEMA and LRS questions.
• Your situation is complex — options positions, RSU income combined with direct equity, or repatriation needs — and the Apex plan's dedicated relationship manager would be useful.

Use neither IBKR nor Paasa if:

• You are a first-time US investor who wants a simple, guided onboarding. Vested is designed for this: curated US stock and ETF access with a simpler interface and no options complexity.
• Your primary need is RSU consolidation — moving employer RSU shares out of a US employer plan into a managed portfolio. Rovia is purpose-built for this workflow.
• You want to use the GIFT City route to avoid TCS on LRS, or you want all your investments — Indian and US — in a single Indian-regulated app. Dhan, INDmoney, and Tickertape serve that use case.
• You are looking for an all-in-one Indian app where you want domestic mutual funds, Indian equities, and US stocks in one interface. INDmoney is the most common solution for this.

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Frequently asked questions

Is my money at Paasa, or at IBKR?

Your account is at Interactive Brokers, in your name, under your PAN. Paasa does not hold your assets. If Paasa shut down tomorrow, your IBKR account and all its assets would be unaffected. You would simply be accessing IBKR directly instead of through the Paasa layer.

Does opening through Paasa reduce my SIPC coverage?

No. SIPC coverage is tied to your IBKR account, which is in your name. The full $500,000 coverage (including up to $250,000 for cash) applies regardless of whether you accessed IBKR via Paasa or directly.

I already have a direct IBKR account. Can I switch to Paasa?

This is a question best addressed to Paasa's team directly, as the account relationship with IBKR involves specifics that depend on how your existing account is structured. The general answer is that Paasa relationships involve IBKR accounts opened through their platform — it is not typically a matter of simply adding Paasa access to an existing standalone account.

Do I still need to file Schedule FA if I use Paasa?

Yes. You are the account holder at IBKR, which is a foreign financial account. Schedule FA disclosure is your legal obligation as an Indian resident with a foreign account, regardless of whether you use Paasa, IBKR direct, or any other access path. What Paasa provides is the pre-computed values for that disclosure — it does not remove the requirement.

Does IBKR's FX rate advantage apply for both access paths?

Yes. Paasa preserves IBKR's near-interbank FX rate (approximately 0.002% conversion fee, $2 minimum). You are not paying a retail bank spread in either case.

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Vested.blog is the editorial publication of Rovia.