I used to live in US on H1B visa. I have opened a trading account in US. Now I have moved back to India but I am still doing trading with US account. Also I have not closed my bank account in US.
My question is, Is it OK to do trading US stocks with US broker while living in India? I believe I have to pay taxes in US since it is a US broker. Will be there any problems doing this in future because of this kind of trading?
I believe I have to pay taxes in US since it is a US broker.
No, not at all. The fact that the broker is a US broker has nothing to do with your tax liabilities. You should update the banks and the broker with your change of status submitting form W8-BEN to them. Consult a tax professional proficient with Indo-US tax treaty as to what you should put in part II. The broker might withhold some of your income and remit it as taxes to the IRS based on what you put in W8-BEN and the type of income, but you can have it refunded (if it exceeds your liability) by submitting a tax return (form 1040-NR).
You do have to pay tax in India, based on the Indian tax law, for your profits in the US. Consult with an Indian tax accountant on that. If I'm not mistaken, there are also currency transfer restrictions in India that you should be aware of.
You can easily go to somebody like icici ask for the demat section and enable overseas stock trading.
