Interactive Brokers for Indian Investors: LRS, TCS, and Setup Guide

The Reserve Bank of India's Liberalised Remittance Scheme allows Indian residents to remit up to $250,000 per financial year (April–March) for permissible capital account transactions, including investing in foreign stocks, ETFs, and bonds. LRS covers all family members independently — a married couple can remit $500,000 combined.

1. Go to ibkr.com and click 'Open Account'. Select Individual account.
2. Choose India as your country of residence and provide PAN card details.
3. Upload identity documents: PAN card (mandatory), Aadhaar or passport for address proof.
4. Complete the financial background questionnaire honestly — IBKR uses this to enable the right product set.
5. Once approved (typically 1–3 business days), fund the account via wire transfer from your Indian bank.
6. Your bank will process this as an LRS remittance — you'll need to complete an A2 form and your bank may require the purpose code S0001 (purchase of equity/securities abroad).

HDFC Bank, ICICI Bank, and Axis Bank all support LRS wire transfers to brokers. HDFC charges ₹500 + GST per outward remittance; ICICI charges a similar flat fee. Avoid small private banks that may have high SWIFT charges or use inferior USD rates.

Wire the funds in USD directly to IBKR's Citibank USD account (details in Client Portal → Transfer & Pay). The transfer typically settles in 1–2 business days. Once credited, convert to the currency of the assets you want to buy through the IBKR Forex section.

Gains from foreign stocks and ETFs held through IBKR are taxable in India. Equity held for more than 24 months qualifies as long-term capital gains (LTCG) and is taxed at 12.5% (post-Budget 2024). Equity held for less than 24 months is short-term capital gains (STCG) taxed at your slab rate.

Dividends received from foreign companies are taxable as income at slab rates. US-domiciled stocks withhold 25% tax at source for Indian residents (India–US DTAA rate); this is creditable against Indian tax liability via Form 67.