US stocks in your Indian ITR: the complete map
July 2026 · 9 min read
Holding US stocks as an Indian tax resident is simple until filing season. Then one brokerage account fans out into four different parts of the return, each with its own period, its own currency-conversion rule, and its own penalty for getting it wrong. This guide is the map: what goes where, in what order, and where the traps are.
The four places US stocks touch an Indian tax return
| Schedule | Legal job | Period |
|---|---|---|
| Schedule FA | Disclose every foreign holding and the brokerage account itself | Calendar year (Jan–Dec) |
| Schedule CG | Tax capital gains on every sale | Financial year (Apr–Mar) |
| Schedule OS | Tax dividends and broker interest at your slab rate | Financial year |
| Schedule FSI + TR + Form 67 | Claim credit for US tax withheld, so income isn't taxed twice | Financial year |
Note the mismatch in the first column: Schedule FA runs on the calendar year while everything else runs on India's April–March financial year. For AY 2026-27 you disclose holdings for calendar 2025 in Schedule FA, but report gains and dividends for FY 2025-26. This is why one broker statement is never enough — you need the same data cut two different ways.
Schedule FA: disclose everything, even at a loss
Schedule FA is pure disclosure — it creates no tax by itself, but skipping it is the single most expensive mistake available to a retail investor, because non-disclosure falls under the Black Money Act: up to ₹10 lakh penalty per year, independent of any tax owed. Disclosure is mandatory if you held anything at any point in the calendar year — even at a loss, even if you sold everything before December 31.
For a US brokerage account you typically fill two tables: Table A3 (each equity holding: date of acquisition, initial value, peak value during the year, closing value, income credited, sale proceeds) and Table A2 (the account itself as a custodial account: account number, opening date, peak and closing balance). Our step-by-step Schedule FA guide for Interactive Brokers walks through both.
Schedule CG: US shares are "unlisted" shares
For Indian tax purposes, shares listed on NASDAQ or NYSE are unlisted shares — they are not listed on a recognised Indian stock exchange. That changes everything:
- Long-term begins after 24 months, not 12 as for Indian listed shares.
- Short-term gains are taxed at your slab rate; long-term gains at the rate the law sets for unlisted shares in your year — these rates were restructured mid-2024, so your CA should apply the one current for your assessment year.
- Every closed lot needs its own cost, proceeds and dates, with both legs converted to INR under Rule 115 — the gain is not simply "USD gain × today's rate".
Schedule OS: dividends at gross, at slab
US dividends are taxed in India at your slab rate on the gross amount — before the 25–30% the US withheld. The withholding is not a deduction from income; it comes back (partly) as a credit in the next step. Reporting only the net amount you received understates income. Schedule OS also wants dividends broken up by quarter for advance-tax interest under section 234C, and any interest your broker paid on idle cash goes here too.
Schedule FSI, Schedule TR and Form 67: getting the US tax back
The US already withheld tax on your dividends, and India taxed the same income again — the India–US DTAA fixes this through a foreign tax credit. It takes three filings: Schedule FSI (per-country income and foreign tax), Schedule TR (the totals), and Form 67 — a separate form on the e-filing portal that must be submitted with proof of the withholding. File Form 67 before the return: processing checks for it mechanically and denies the credit when it's missing. The full mechanics — including the treaty-rate cap and the W-8BEN trap — are in our foreign tax credit guide.
The right order to work in
- Export your broker data for both periods — calendar year and financial year.
- Build Schedule FA from the calendar-year data (lot-level, with peak values).
- Build Schedule CG and OS from the financial-year data.
- Total the foreign income and withholding into FSI/TR numbers.
- File Form 67 on the portal, with your broker statement as proof.
- File the ITR itself (ITR-2 or ITR-3 — foreign assets rule out ITR-1/4).
Fixing past years: missed disclosures from recent years can often still be corrected — through a revised return within the assessment year, or an updated return (ITR-U) for years further back. Your CA can confirm which route applies to your case and how far back it currently reaches.
Frequently asked questions
Do I need to file Schedule FA if I only hold RSUs or ESPP shares?
Yes. Shares in a foreign company held through an employer stock plan are foreign assets like any other, and the brokerage account holding them (Schwab, Morgan Stanley, Fidelity, IBKR) is typically reportable too. The disclosure obligation does not depend on how you acquired the shares.
I sold all my US stocks during the year. Do I still report them in Schedule FA?
Yes. Schedule FA covers assets held at ANY time during the calendar year, not just those held on December 31. A holding you bought and sold within the year still gets a row, with its sale proceeds disclosed.
Can I use ITR-1 if I own US stocks?
No. Holding any foreign asset makes you ineligible for ITR-1 and ITR-4. You must file ITR-2 (or ITR-3 if you have business income), because only those forms contain Schedule FA.
What happens if I skip Schedule FA?
Non-disclosure of a foreign asset falls under the Black Money Act, which carries a penalty of up to ₹10 lakh per year of non-disclosure and, in serious cases, prosecution — and this exposure is independent of whether any tax was actually underpaid. The law provides limited carve-outs for smaller holdings, and past years can often still be fixed through a revised or updated return — your CA can confirm which applies to you.