1. What are the costs involved in setting up a Vested account?
Vested charges a time account setup fee of ₹399 to create your US investing account. Please note, there is no cost involved to buy/sell either stocks or ETFs on Vested. Check Vested pricing here
2. How do I fund my Vested account?
Investments in US equities must be made in US Dollars(USD). You must wire (remit) USD to Vested partner bank in the US to fund your account. In order to do this, you must fill out an LRS form (it’s called the A2 form) and submit it to your bank.
Do not worry! Vested will make this process easy for you. When you set up your US Stocks portfolio, Vested will guide you through this process. Please note that there are costs involved in the fund transfer process. These costs vary according to the bank you use. For example, there is a fixed cost of between ₹500 - ₹1500 per fund transfer.
3. How will taxes work for the US investing?
For Vested users there are two types of taxation events:
1. Taxes on investment gains: You will be taxed in India for this gain. You will not be taxed in the US. The amount of taxes you have to pay in India depends on how after how long you exit the investment. If you exit after 24 months, it is treated as long-term capital gains and the gains will be subject to 20% tax with indexation benefit. Below 24 months is short-term capital gain and is taxed according to your income tax slab.
2. Taxes on dividends: Unlike investment gains, dividends will be taxed in the US at a flat rate of 25%. Fortunately, the US and India have a Double Taxation Avoidance Agreement (DTAA), which allows taxpayers to offset income tax already paid in the US. The 25% tax you already paid in the US is made available as Foreign Tax Credit and can be used to offset your income tax payable in India.