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I am an Indian resident with an account in a brokerage which allows trading US stocks. I am aware that if I sell US stocks in this account while being an Indian resident, I will be taxed since these will be treated as foreign assets which has tax implications for long term as well as short term gains in Indian tax laws.

Is there any way I can avoid tax on selling these stocks. If I become a US citizen, can I avoid tax on selling these stocks which I bought while I was an Indian resident?

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As an US citizen, you will have to pay US taxes on any gains you make.

It doesn’t matter if you bought the shares before you became a citizen, have them stored on the moon, or found them in your grandma’s basement. Any gains from selling are taxable. It also doesn’t matter where you live.

So overall, becoming a US citizen (or even moving to the US) does not improve your situation; but it might worsen it, as you might owe taxes in both countries (and if you are lucky, you only have to pay the higher of the two amounts).

  • Thanks, I read about tax slabs in US and corresponding tax rates on long term capital gains. Considering I will always sell long term, I guess becoming a US citizen will improve my situation. The tax brackets for long term capital gains in US depend on salary - 0pc to 20pc, unlike in India where long term capital gains in foreign assets will always be taxed at 20pc. – Shashank Kapoor Oct 21 '17 at 11:08

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