Trading from India

[Phal]

Hi all,

 

I am not sure if this is the right place to ask. I have worked in US on H1B Visa. While working I have opened an account in one of US stock broker. I came to India for stamping, got 221g and it has been more than 1 year I hav heard anything from the US consulate. I have decided to stay in India. I would like to know if I can continue do trading with US broker and buy US stocks (NASDAQ) from India. I will be paying taxes for trading. Is this legal? What would be the worst case scenario if this is not legal? I am not planning to move back to US.

[GcLLC]

The answer is yes to the extent that you would not be violating any US immigration laws. But you have to consider the tax consequences in US/India and the FEMA consequences in India (since you mentioned you will not be coming back to US). You have to talk with a CPA in US and a CA in India. Potentially the CA might refer to a lawyer for discussing FEMA consequences. 

[cap-gap]

The answer is yes to the extent that you would not be violating any US immigration laws. But you have to consider the tax consequences in US/India and the FEMA consequences in India (since you mentioned you will not be coming back to US). You have to talk with a CPA in US and a CA in India. Potentially the CA might refer to a lawyer for discussing FEMA consequences. 

u mean FICA? only apply to day traders and not for foreigners..however OP is likely to be resident-alien for tax purposes for couple of more years..but still unlikely to be a day trader..

 

and no chance of violating immigration rules in india..

[GcLLC]

u mean FICA? only apply to day traders and not for foreigners..however OP is likely to be resident-alien for tax purposes for couple of more years..but still unlikely to be a day trader..

 

and no chance of violating immigration rules in india..

 

Sorry, I should have been more clear: FEMA, like in Foreign Exchange Management Act in  India. If an Indian citizen resides in India for more than 180 days, then the person usually ceases to be treated as a Non Resident Indian (NRI). There are several tax and Forex consequences for this.

 

Non-US persons have different tax consequences for trading in the US. For example. if the beneficiary is a non-US entity the broker has to withhold 30% of dividends paid on stocks. On the other hand offshore accounts are typically not liable for US taxes. I am not sure whether a retail broker would be able to handle accounts from non-US persons.