LRS TCS Calculator — remittance tax when investing in US stocks
Calculate TCS on your LRS remittance for US stock investing. How much is deducted, when can you claim it back, and what is your net post-tax return after forex?
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About the LRS / TCS Calculator
Investing in US stocks from India has exploded since 2019 — Vested Finance alone has processed over $1 billion in LRS remittances. The attraction is real: dollar-denominated assets, geographic diversification, and access to companies (Apple, Nvidia, Meta) that have no Indian equivalent. But the compliance layer is what trips up most retail investors.
TCS (Tax Collected at Source) at 20% kicks in above ₹7 lakh of cumulative LRS remittances per financial year. This means if you send ₹10 lakh, your bank deducts ₹60,000 as TCS (20% on the ₹3 lakh above the threshold). This is NOT a tax loss — it's advance tax collection. You claim it back in your ITR as a tax credit. But the cash flow impact is real: you're effectively lending the government ₹60,000 until you file your return.
The rupee depreciation factor is the other piece most Indian investors underweight. If USD/INR moves from ₹84 to ₹90 (7% depreciation) over 5 years, a 10% USD return actually becomes approximately 17% in rupee terms — the currency tailwind compounds returns. Conversely, if INR strengthens (unlikely historically but possible), it mutes your returns.
Tax on exits: capital gains from US stocks sold by Indian residents are taxable in India. Less than 24 months (post-Budget 2024) = slab rate. More than 24 months = 12.5% LTCG without indexation. Dividends from US stocks: 25% US withholding tax (reduced from 30% under DTAA for certain cases) + India slab tax, with credit for US tax paid. US estate tax (40% above $60,000 for non-US persons) is a risk often ignored — consider holding via LLP or trust structure if exposure grows large.
This calculator models: (1) TCS deducted now vs claimed back in ITR, (2) net corpus in ₹ terms after expected USD returns and INR depreciation over your holding period, (3) Indian tax on exit at 12.5% LTCG assuming >24 month hold. Use it to compare the true cost of direct LRS investing vs the India-listed international ETF route (no LRS required, but taxed as debt funds at slab rate).