New Delhi. America's leading semiconductor chipmaker Nvidia has become the world's most valuable company in terms of market cap, leaving behind companies like Microsoft and iPhone maker Apple. Nvidia's shares have seen a tremendous rise in the last few years, due to which investors have become rich along with the company.
Let us know how much money you will have to spend to buy stocks of big US companies like Nvidia, Microsoft, Apple, Tesla and Google and whether you can invest in these firms from India as well.
Nvidia's shares closed at $130.78 on Friday, up 1.19 percent. This means you will have to spend about Rs 11,000 to buy Nvidia's shares. Nvidia's share price has increased by 203 percent in the last one year and 3,350.66 percent in 5 years. Bill Gates' Microsoft stock is at $445.70, which means you will have to pay more than Rs 37,000 for it.
At the same time, Apple's stock fell by 2.15 percent and closed at $209.68. This means that one share of Apple will cost you about Rs 17,500. One stock of Jeff Bezos' Amazon will cost you about Rs 15,500 (186.10 dollars). At the same time, you will have to pay about 15,000 (181.57 dollars) for one share of Tesla owned by Elon Musk.
The answer is yes. You can easily invest in US companies from India. There are many Indian platforms that allow you to invest in US stocks from India. There are two ways to invest in the US stock market from India. The first is to invest directly in stocks, such as buying shares of Nvidia, Apple, Facebook or General Motors. The second is indirect investment through mutual funds or ETFs.
You can invest directly in the US stock market by opening a foreign trading account with a domestic or foreign broker. However, you should know all the charges before choosing a brokerage. Especially, the cost of investment can be high considering the brokerage and currency conversion charges. There are also many mutual funds that invest in US stocks or mutual funds from there.
How much can one invest in American stocks?
Under the Liberalised Revenue Scheme (LRS) of the Reserve Bank of India (RBI), Indian citizens can invest Rs 2,50,000 i.e. Rs 2 crore annually without any special permission. However, you will also have to keep tax in mind while deciding to invest in the US market.
Under RBI's Liberalised Remittance Scheme (LRS), if you transfer an amount of more than Rs 7 lakh from the US to India, then 5 per cent TCS (Tax Collected at Source) will be levied. However, this applies to the amount above Rs 7 lakh and not the total amount. You can also claim a refund on this while filing Income Tax Return (ITR).
Dividends are taxed at 25 per cent for Indian citizens in the US. There is no capital gains tax on your investments in the US, but in India you will have to pay it. Banks also charge currency conversion and transfer fees. You
you invest in the US market, you can get many benefits. There is much less volatility in the US market as compared to India. America is a hub of tech innovation, so you can invest in a company at a very low price, which later becomes a giant like Nvidia, Apple or Tesla. In the last decade, the performance of the US stock market has been better than India.
However, you should also be aware of the losses. You should be aware of the US economy and the rules and regulations there and stay updated about all the news that can have an impact on the stock market. You will have to pay more and additional charges there as compared to a domestic investor. Even if you do not understand the taxation of both the countries, you may suffer losses.
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