How NRIs Can Invest in Indian Stocks in 2026: PIS, Demat, Taxes Explained

Yes, NRIs can invest directly in Indian listed stocks. You need an NRI bank account, an NRI demat and trading account, and, if you want to repatriate freely, a Portfolio Investment Scheme (PIS) permission from an RBI-designated bank. The rules sit under FEMA, specifically Schedule 3 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and the tax treatment follows Sections 111A and 112A of the Income Tax Act.

The mechanics changed meaningfully in 2024 and 2025. Capital gains rates went up in the July 2024 Budget, and in July 2025 SEBI dropped the custodian (CP code) requirement that had made F&O trading painful for NRIs. This guide covers the current state of play as of 2026.

Can NRIs Buy Stocks Directly in India?

Yes. An NRI can buy and sell shares listed on NSE and BSE through a registered Indian broker, on either a repatriable basis (money can leave India freely) or a non-repatriable basis (money stays in India, with limits on taking it out). The legal basis is FEMA's portfolio investment framework: Schedule 3 of the Non-debt Instruments Rules for repatriable investment, Schedule 4 for non-repatriable.

Two limits matter under Schedule 3. A single NRI cannot hold more than 5% of a company's paid-up capital, and all NRIs together cannot cross 10% (a company can raise this aggregate cap to 24% by shareholder resolution). In practice you will almost never hit these limits as a retail investor; the exchanges publish lists of stocks near the ceiling and brokers block fresh buys in them.

What you cannot do: trade as a resident. If you moved abroad and still run your old resident Zerodha or ICICI account, you are offside under FEMA. Convert it to an NRI account. Brokers now make this a standard process.

What Is the PIS Route and When Do You Need It?

PIS is an RBI scheme, administered through designated bank branches, that tracks every NRI stock purchase and sale made with repatriable funds. You need PIS only if you invest through an NRE account. If you invest through an NRO account, most brokers now use the non-PIS route, which skips the bank reporting layer entirely.

Under PIS, your bank issues a permission letter, routes your trade funds through a dedicated NRE-PIS bank account, and reports each transaction to RBI. The bank also computes and deducts capital gains tax on every sell trade. This bookkeeping is why PIS accounts carry extra costs: banks typically charge an annual PIS maintenance fee plus a per-transaction reporting charge.

The practical rule of thumb in 2026:

Want sale proceeds and gains freely repatriable abroad? Use the NRE-PIS route.
Investing India-sourced money (rent, Indian salary arrears, inheritance) or comfortable with the USD 1 million per year repatriation window? Use the NRO non-PIS route. It is cheaper, has less paperwork, and supports more product types.

You can hold both. Many NRIs run an NRE-PIS account for long-term repatriable holdings and an NRO non-PIS account for everything else.

NRE vs NRO Demat and Trading Accounts: Which Should You Pick?

Pick NRE-PIS if repatriation is the priority; pick NRO non-PIS if flexibility and cost matter more. The demat account itself is linked to whichever bank account funds it, and that linkage decides what you can trade and how money moves.

If you are still setting up the underlying bank accounts, read our NRE vs NRO account guide first, and see how to open an NRI account online in 2026 for the bank-side process.

Feature	NRE-PIS route	NRO non-PIS route
Funding source	Foreign earnings remitted to NRE account	Indian income or transfers into NRO account
PIS permission needed	Yes, from designated bank	No
Repatriation	Principal and gains fully repatriable	Up to USD 1 million per financial year, with CA certification
Equity delivery	Yes	Yes
IPOs	Yes	Yes
F&O	No	Yes (post the 2025 SEBI change, no custodian needed at most brokers)
Equity intraday / BTST	No	Allowed at some brokers (e.g., Zerodha enabled it on non-PIS in 2025)
Mutual funds	Yes (via NRE, outside PIS)	Yes
Tax deduction	Bank deducts TDS per trade	Broker deducts TDS per trade
Typical extra costs	PIS annual fee + per-trade bank reporting charge	None beyond brokerage

One nuance on joint accounts: an NRI demat account can have joint holders, but they must all be NRIs on the same basis (repatriable or non-repatriable). You cannot mix with a resident joint holder.

What Can NRIs Trade, and What Is Off Limits?

NRIs can trade equity delivery, IPOs, ETFs, mutual funds, and bonds. Exchange-traded currency derivatives are off limits, and commodity derivatives remain restricted. F&O and intraday equity are the areas where the rules shifted recently, so it is worth being precise.

Equities

Delivery-based buying and selling of listed shares is allowed on both routes. Through NRE-PIS, every trade is reported to RBI. Through NRO non-PIS, it is a normal broker trade with TDS applied on gains.

F&O: the 2025 change

For years, an NRI who wanted to trade index or stock derivatives needed a custodial participant (CP) code, a custodian relationship, and an NRO non-PIS account. The custodian setup was expensive enough that most retail NRIs skipped derivatives entirely. In July 2025, SEBI removed the mandatory CP code requirement, and brokers such as Zerodha now allow NRIs to trade F&O directly from an NRO non-PIS account with no custodian. F&O remains unavailable on the NRE-PIS route, and settlement must run through NRO funds, so profits from derivatives are non-repatriable beyond the standard NRO limits.

Intraday equity

The long-standing position was that NRIs must take delivery, so intraday equity trading was blocked. After the 2025 regulatory easing, some brokers began permitting equity intraday and BTST trades on NRO non-PIS accounts. Zerodha enabled both in 2025. This remains broker-dependent and applies only to the non-PIS route; on NRE-PIS you still cannot square off the same day. Check your broker's current policy rather than assuming.

Still not allowed

Currency derivatives on Indian exchanges
Trading through a resident account after becoming an NRI
Short selling in the cash segment

Which Brokers Accept NRI Accounts in 2026?

Most large Indian brokers accept NRIs, but their PIS bank tie-ups, charges, and country restrictions differ. The main options:

Zerodha: Offers both NRE-PIS and NRO non-PIS accounts. Cut NRI brokerage in September 2025 to Rs 50 per executed order or 0.5%, whichever is lower, across delivery, intraday, and F&O. Accepts US and Canada-based NRIs with additional declarations. PIS tie-ups with select banks (historically Axis, HDFC, IndusInd, Yes Bank).
ICICI Direct: Bundled 3-in-1 with ICICI Bank NRE/NRO and PIS accounts. Convenient if you already bank with ICICI; brokerage is higher than discount brokers.
HDFC Securities: Similar 3-in-1 model with HDFC Bank. Strong for investors who want banking, PIS, and broking under one roof.
Kotak Securities, Axis Direct, SBI Securities: Bank-backed alternatives with comparable NRI offerings.
Prostocks, and other discount brokers: A few specialize in low-cost NRO non-PIS accounts.

What about US and Canada-based NRIs?

US and Canadian residents face extra friction because of FATCA and local securities regulations, but direct stock investing is still workable. Zerodha, ICICI Direct, and HDFC Securities accept US/Canada NRIs, usually with a W-9 or equivalent declaration and sometimes a physical form. The bigger problem for US persons is Indian mutual funds: most AMCs refuse US/Canada investors, and the ones that accept them create PFIC reporting headaches on your US return. Direct stocks avoid PFIC entirely, which is one reason US-based NRIs often prefer them. Details in our NRI mutual funds and US PFIC tax guide.

How Do You Open an NRI Trading Account? Step by Step

The full chain is bank account, PIS permission (if NRE route), then demat and trading account. Expect two to four weeks end to end, faster if your bank and broker are integrated.

Get your documents ready: PAN card, passport, visa or residence permit, overseas address proof, passport-size photo, and a cancelled cheque of the NRI bank account. Documents usually need attestation by the Indian embassy, a notary, or your banker abroad.
Open or convert your bank account: Open an NRE and/or NRO savings account, or convert your existing resident account to NRO.
Apply for PIS permission (NRE route only): Your bank issues a PIS letter and opens a dedicated NRE-PIS account for trade settlements.
Open the demat and trading account: Apply with your broker, submitting the PIS letter if applicable. Zerodha and others now run this mostly online for many jurisdictions.
Fund and trade: Remit funds to the NRE-PIS or NRO account, then place delivery orders. For F&O, activate the segment on your NRO non-PIS account.

If you previously invested as a resident, also convert your old demat holdings: shares bought as a resident move to an NRO demat account and stay non-repatriable.

How Are NRI Stock Gains Taxed in 2026?

Short-term gains on listed equity are taxed at 20% under Section 111A, and long-term gains above Rs 1.25 lakh per year are taxed at 12.5% under Section 112A, with no indexation. These rates apply to sales on or after 23 July 2024 and are unchanged for FY 2025-26. Securities Transaction Tax (STT) must have been paid for these concessional sections to apply, which is automatic for on-market trades.

Gain type	Holding period	Section	Rate (plus surcharge and cess)	Exemption
Short-term capital gain, listed equity	12 months or less	111A	20%	None
Long-term capital gain, listed equity	More than 12 months	112A	12.5%	First Rs 1.25 lakh of LTCG per year
F&O trading profit	N/A	Business income / other income	Slab rates	Basic exemption per slab

Two NRI-specific catches:

No basic exemption offset against these gains. A resident with no other income can absorb capital gains within the basic exemption limit. An NRI cannot set 111A or 112A gains against the basic exemption. The Rs 1.25 lakh LTCG exemption under 112A itself is available to NRIs.
Dividends are taxable in India at 20% for NRIs (plus surcharge and cess) with TDS at source, subject to lower treaty rates under the DTAA with your country of residence. File Form 10F and a tax residency certificate to claim treaty rates.

Your country of residence will usually also tax these gains. The US taxes worldwide income, so a US-based NRI reports Indian gains on their 1040 and claims a foreign tax credit for Indian tax paid. The India-US DTAA does not exempt you from either side; it prevents double taxation through credits.

What About TDS on NRI Capital Gains?

Unlike residents, NRIs face tax deduction at source on every sale. Under Section 195, the payer must deduct tax on income chargeable in an NRI's hands. In practice: on the NRE-PIS route, your designated bank computes the gain on each sell trade and deducts 20% (plus surcharge and cess) for short-term or 12.5% for long-term before crediting proceeds. On the NRO non-PIS route, the broker performs the same deduction.

Because TDS is applied trade by trade, it ignores your Rs 1.25 lakh LTCG exemption and any losses you booked on other trades. Most NRIs therefore end the year with excess TDS and claim a refund by filing an Indian income tax return. Filing is worth it even for small portfolios; see our NRI tax filing guide for the process, due dates, and how loss set-off and carry-forward work.

Can You Repatriate Money From Indian Stock Sales?

If you invested through NRE-PIS, yes, without limit: sale proceeds net of TDS return to your NRE account and can be wired abroad freely. If you invested through NRO funds, repatriation is capped at USD 1 million per financial year across all your NRO assets, and each remittance needs Form 15CA and a chartered accountant's certificate in Form 15CB confirming taxes are settled.

This is the entire economic case for paying PIS fees. If there is any real chance you will want this money outside India, in dollars or dirhams, within your investing horizon, route fresh foreign money through NRE-PIS. If the money is Indian-sourced anyway, the USD 1 million window is generous enough for most portfolios.

Is GIFT City a Better Route for Some NRIs?

For NRIs who want India exposure in US dollars without PIS, TDS, or rupee conversion, GIFT City's IFSC is now a credible alternative, though you are mostly buying funds and derivatives rather than individual Indian stocks. GIFT City (Gujarat International Finance Tec-City) is treated as an offshore jurisdiction under FEMA, so an NRI investing there is not making an investment "in India" for exchange-control purposes.

What you can actually do there in 2026:

Invest in USD-denominated funds (Category III AIFs and retail schemes from major Indian AMCs) that in turn hold Indian equities. No PIS, no PAN-linked TDS machinery on the same basis as onshore, and dealings are in foreign currency.
Trade GIFT Nifty derivatives on NSE IX, where non-residents enjoy exemptions from STT and capital gains tax on specified securities traded on IFSC exchanges.
Hold funds in a foreign currency account at an IFSC banking unit without converting to rupees.

The trade-offs: minimum tickets on AIFs are high (often USD 150,000, with some retail schemes lower), product choice is narrower than onshore, and direct delivery-based trading of NSE/BSE-listed shares from a GIFT account is not the standard retail offering. For a US-based NRI, GIFT funds may also raise the same PFIC issues as onshore mutual funds, so take US tax advice before committing.

Frequently Asked Questions

Do NRIs need a PIS account to invest in Indian stocks?

Only for the NRE (repatriable) route. Investing through an NRO account via the non-PIS route needs no PIS permission, and this is now the default at brokers like Zerodha for NRO accounts. NRE investing still requires a PIS letter from an RBI-designated bank.

Can NRIs trade futures and options in India?

Yes, through an NRO non-PIS account. Since SEBI removed the mandatory CP code requirement in July 2025, most brokers no longer require a custodian for NRI F&O. F&O is not available on the NRE-PIS route, and profits are treated as non-repatriable NRO funds.

What is the capital gains tax rate for NRIs on Indian shares in 2026?

20% on short-term gains (held 12 months or less) under Section 111A, and 12.5% on long-term gains above Rs 1.25 lakh per year under Section 112A, plus surcharge and cess. TDS at these rates is deducted on each sale, and you claim any excess back by filing an Indian tax return.

Can US-based NRIs open an Indian trading account?

Yes. Zerodha, ICICI Direct, and HDFC Securities accept US and Canada-based NRIs, with extra FATCA declarations. Direct stocks are usually the cleaner choice for US persons because Indian mutual funds trigger PFIC reporting on the US return.

Can I keep using my resident demat account after becoming an NRI?

No. FEMA requires you to convert it. Your existing holdings move to an NRO demat account (non-repatriable), and fresh investing happens through NRE-PIS or NRO non-PIS accounts. Continuing to trade as a resident risks penalties and account freezes.

Is money from Indian stock sales stuck in India?

Not if you planned the route. NRE-PIS proceeds are fully repatriable after tax. NRO proceeds can be repatriated up to USD 1 million per financial year with Form 15CA/15CB certification. Only amounts beyond that window wait for the next financial year.

This article is general information, not investment or tax advice. FEMA rules, SEBI circulars, and broker policies change; confirm current requirements with your bank, broker, and a cross-border tax adviser before acting.