Yes. You can transfer your US stocks and ETFs to another broker without selling and paying tax on your capital gains.
The standard way to transfer US stocks and ETFs without selling (in-kind transfer) is ACATS (Automated Customer Account Transfer Service). It allows you to transfer your US stocks and ETFs to another broker or platform without selling and creating a tax liability, and is supported by all brokers that allow you to purchase US stocks and ETFs.
This guide covers how the transfer process works, what it costs, and what it means for your Indian taxes.
Table of contents
- Why Indian investors need to switch brokers
- How an in-kind transfer works
- Selling vs transferring: a comparison
- What carries over when you transfer
- What you can and cannot transfer without selling
- What about RSUs?
- What does it cost and how long does it take?
- What about non-US holdings like UCITS ETFs?
- How to transfer to Paasa
- Common questions
- About Paasa
Why Indian investors need to switch brokers
There are two situations where this comes up:
You want to move to a better platform
Investors who started investing in US stocks through one platform often find, over time, that it doesn't meet their needs.
The compliance support is weak, the reporting doesn't integrate with their Indian tax filing, access is limited to US stocks only, or the forex markup is eating into returns.
Switching is the obvious answer, but it shouldn't come at the cost of a tax bill.
Your US broker is closing your account
Many US brokers, including some of the largest ones, do not allow non-US residents to hold accounts. When you return to India, they will eventually ask you to close your account.
Selling everything at that point means booking capital gains on every appreciated position you hold, even if you have no intention of exiting those investments. If you've held US stocks for several years, those gains can be substantial.
How an in-kind transfer works
An in-kind transfer moves your actual shares from one broker to another without selling them. The mechanism that makes this possible in the US is called ACATS (Automated Customer Account Transfer Service), run by the National Securities Clearing Corporation.
The process in brief:
- You open an account at the new broker
- You fill out a Transfer Initiation Form (TIF) at the new broker with your old account details
- The new broker submits the request through ACATS, notifying your old broker
- The old broker validates within 1 business day and delivers within 3 business days
- Your shares arrive in the new account, intact
The new broker handles everything, and your old broker is legally required to cooperate.
For a full explanation of how ACATS works, see our ACATS explainer for Indian investors.
Selling vs transferring: a comparison
| Sell and rebuy | In-kind transfer | |
|---|---|---|
| Indian capital gains tax | Yes, on every appreciated position | No |
| LRS remittance needed | Yes, if you bring the funds back to India | No |
| Cost | Brokerage on sale + brokerage on rebuy + tax on gains | $50–$100 outgoing fee |
| Time | Immediate sale, then rebuy | 5–7 business days |
| Cost basis at new broker | Resets to current price | Original purchase price and date carry over |
| Holding period | Resets to zero | Continues from original purchase date |
The holding period point is easy to overlook. If you were 36 months into a position, it qualifies for long-term capital gains treatment at 12.5%. Selling and rebuying resets that clock (even if you made no gains). You'll have to pay short-term tax at your slab rate in India if you sell this position within the next 24 months after rebuying.
What carries over when you transfer
When shares move via ACATS, the following transfer with them:
- Original purchase price (your cost basis in USD)
- Original purchase date (which determines your holding period and LTCG vs STCG classification)
- Tax lot details (if you hold multiple lots of the same stock bought at different prices)
Your Indian ITR requires the USD acquisition cost converted to INR at the historical exchange rate per Rule 115 of the Income Tax Rules. Before initiating any transfer, download a full cost-basis report from your old broker as a backup.
What you can and cannot transfer without selling
These transfer in-kind:
- US-listed stocks
- US-listed ETFs
- US Treasuries, corporate bonds, and municipal bonds
- Options
- Mutual funds
- Cash
These cannot move in-kind and will be liquidated:
- Fractional shares of stocks and ETFs (cash proceeds transfer instead)
- Proprietary mutual funds the new broker doesn't carry
- Certain OTC and micro-cap stocks the new broker won't accept
- Cryptocurrencies
Also, the broker you are moving to must support the asset type. For example, you cannot transfer options to a platform like Paasa or IBKR India as trading in foreign derivatives is prohibited under current Indian regulations.
If you hold any of these, the rest of your portfolio can still transfer in-kind. You can run a partial transfer that excludes the positions the new broker does not support and handle them separately.
What about RSUs?
Vested RSUs are your shares and can be transferred in-kind. The process depends on where they are held.
RSUs at a standard brokerage account transfer through ACATS in the normal way.
RSUs held inside an employer stock plan platform (such as Fidelity Stock Plan Services or Morgan Stanley StockPlanConnect) typically use a DTC Free of Payment (FOP) transfer rather than ACATS, because stock plan accounts aren't always standard ACATS-eligible brokerage accounts.
The end result is the same: shares move in-kind with no taxable event.
Unvested RSUs cannot be transferred. They stay with the employer's stock plan provider until they vest.
What does it cost and how long does it take?
Cost
The receiving broker charges nothing for an incoming transfer. The outgoing fee is charged by your old broker:
| Broker | Full transfer | Partial transfer |
|---|---|---|
| Charles Schwab | $50 | $0 |
| Fidelity | $0 | $0 |
| Vanguard | $100 | $100 |
| Interactive Brokers | $0 | $0 |
| IndMoney | $65 | $65 |
| Vested | $65 | $65 |
Timeline
Most transfers of US stocks and ETFs complete in 5 to 7 business days. Your account will be frozen at both brokers during the transfer. You cannot trade, place orders, or withdraw cash until settlement completes.
What about non-US holdings like UCITS ETFs?
ACATS is US-only infrastructure. It can move US-listed stocks and ETFs, but it cannot move UCITS ETFs (domiciled in Ireland or Luxembourg), UK-listed shares on the LSE, Swiss names on SIX, or Hong Kong-listed shares. Those use separate international transfer systems.
If you hold a mix of US and non-US assets and want to consolidate everything at one platform, you need a broker that supports international transfers across all those markets, not just ACATS for the US sleeve.
How to transfer to Paasa
Step-by-step transfer instructions for every major global broker is available in the Paasa app.
Simply download the app, complete your sign-up, and follow the in-app guide to initiate your in-kind transfer. Our team handles the documentation and coordinates with your existing broker on your behalf to ensure a smooth transition.
If you need any assistance regarding the transfer process, feel free to contact us directly at paasa@support.com or contact us via WhatsApp at +91 98710 76013.
Common questions
Will this affect my LRS limit for the year?
No. An in-kind transfer moves assets already held in the US. There is no INR-to-USD conversion and no fresh remittance. Your $250,000 annual LRS limit is untouched.
Do I need to report this in my ITR?
No separate disclosure is required for a broker switch. You haven't sold anything, so there is no capital gain to report. Your Schedule FA disclosure (for ROR filers) reports foreign holdings as of 31 December of the financial year, regardless of which broker holds them on that date. The broker you are with at year-end is the one that appears in Schedule FA.
Can I do a partial transfer?
Yes. You specify exactly which positions to move, and your old account stays open with everything else. This is useful if you have fractional shares, proprietary funds, or positions the new broker won't accept. Most major US brokers support partial transfers, and some charge a lower fee for partials than for a full transfer.
What if my new broker won't accept one of my positions?
You have three options: sell that specific position before initiating the transfer (taxable event on those shares only), exclude it from the transfer and leave it at the old broker, or ask the old broker to return it to you separately while the rest of the account transfers.
What are the most common reasons transfers get rejected?
The most common causes are a name mismatch between accounts, a wrong account number, mismatched account types (joint vs individual), or an incorrect tax ID. Make sure both accounts are in your exact full legal name with a matching tax ID before initiating.
About Paasa
Paasa is a global investing platform built for Indian HNIs, family offices, and institutions. We provide direct access to markets across the US, UK, Europe, Switzerland, and Asia, with an India-facing compliance layer built in from the ground up.
What that means in practice:
- FEMA and LRS compliance embedded into every transaction
- Tax reporting and analytics calibrated for Indian investors, covering LTCG, STCG, dividend withholding, and TCS tracking
- End-to-end support for remittance structuring, cost basis reconciliation, and Schedule FA disclosure
- In-app transfer guides for every major US broker, so you can move your existing holdings to Paasa without selling
