US Estate Tax for Indian Investors: The $60,000 Rule Explained (2026)

Short answer: if you live in India (or the Gulf) and are not a US citizen and not domiciled in the US, the US can tax your estate on US assets when you die, including shares of US companies, US-listed ETFs and vested RSUs in a US employer. If those assets exceed $60,000, your executor must file a US estate tax return, and rates go up to 40%. India has no estate tax treaty with the US.

Key points

• The US treats shares of US companies as US assets, wherever the account was opened.
• Above $60,000 of US assets, a non-resident's estate must file Form 706-NA. The top rate is 40%.
• India and the UAE have no estate tax treaty with the US, so there is no treaty relief.
• Even below $60,000, heirs usually need an IRS transfer certificate, which the IRS says takes 12 to 18 months to process.
• Careful investors plan how they hold US shares and leave heirs a clear file.

Who does the US estate tax apply to?

US estate tax applies to everyone, but in two very different ways. US citizens and US-domiciled residents have a large exemption. Everyone else, called "nonresidents not citizens" by the IRS, is taxed only on assets the US treats as located in the US, and gets a much smaller allowance.

That second group includes most Indian residents who buy US shares under the Liberalised Remittance Scheme, Indian employees holding RSUs in a US parent, and NRIs in Dubai, Riyadh or Singapore who invest through a US broker. The rule follows the asset, not the passport or the app.

What counts as a US asset?

According to the IRS guidance for nonresidents, US-situated property includes US real estate, tangible property located in the US and certain intangible property, such as US marketable securities. The IRS also says that stock of US corporations is a US asset even if the certificates are held abroad.

In practice, that means shares of Apple, Microsoft or Nvidia bought through an Indian investing app, US-listed ETFs, and vested RSUs in a US employer all count. The IRS lists some exclusions, such as securities that generate portfolio interest and bank deposits not connected with a US business.

How much tax, and when does it start?

The executor of a non-resident's estate can generally transfer US assets without filing a US estate tax return if those assets, together with adjusted taxable gifts, do not exceed $60,000 at the date of death. Above that, Form 706-NA is required and tax is worked out on the US assets, with rates reaching 40% at the top.

Item	What applies to a non-resident, non-citizen
Filing line	US assets above $60,000 at death
Return	Form 706-NA
Top rate	40%
India–US estate tax treaty	None
Transfer to heirs	IRS transfer certificate usually needed
Indian remittance limit	USD 250,000 a financial year under LRS

The $60,000 line has not moved with inflation, so a portfolio built steadily over ten years, or a few years of RSU grants, can cross it without the investor noticing.

Does the India–US tax treaty help?

No. The India–US double taxation agreement covers income tax, not estate tax. The US has estate tax treaties with about 15 countries, including the UK, but India and the UAE are not among them. A UK resident may have treaty relief to consider; an Indian or UAE resident does not.

What do heirs actually go through?

US brokers and custodians generally will not release a deceased non-resident's US shares until the IRS confirms that any estate tax has been dealt with. The IRS does this with a transfer certificate. For estates that do not need to file Form 706-NA, the IRS says it takes 12 to 18 months to process the affidavit and documents once it has everything.

So even a family well under $60,000 can wait more than a year, gathering death certificates, wills and account statements across two countries. Above $60,000, they also need a US return, a valuation and often a US adviser.

How do careful investors plan for it?

The answer is not to stop investing in the US. It is to decide how to hold US exposure and to leave a plan. Common approaches, as general market practice, include:

• Funds based outside the US. Ireland-domiciled funds that track US indices are one option for non-US investors. Shares of a non-US company are generally not US assets for US estate tax. Fees, dividend treatment and Indian tax differ from direct shares.
• Indian international funds. Rupee mutual funds that invest in US shares. They sit within SEBI's industry-wide cap on overseas investment, and some fund houses have paused new money in 2026 as that cap fills.
• Direct shares, watched and documented. Investors who prefer direct holdings track each family member's US assets against the $60,000 line, keep a will that covers them, and leave a list of accounts and the broker's death-claim steps.

Each route has trade-offs, and none is right for everyone. The right one depends on the size of the holding, your residence, your heirs and how India taxes the gains.

What should Indian residents also report?

If you are resident and ordinarily resident in India, foreign shares, ETFs, funds and RSUs must be reported in Schedule FA of your income tax return every year, even if you sold nothing. Remittances to buy them go through the Liberalised Remittance Scheme, which allows up to USD 250,000 a financial year, and tax is collected at source on investment remittances above ₹10 lakh in a year.

A short checklist

1. Add up US shares, US-listed ETFs and RSUs for each family member, at today's prices.
2. Check each person's total against the $60,000 line, and how fast it is growing.
3. Compare holding routes on fees, dividends, Indian tax and what heirs must file.
4. Keep Schedule FA reporting complete each year.
5. Write a will that covers foreign assets, and leave a list of accounts with contact details.

Outcomes depend on your facts, so it is worth reviewing your holdings with an adviser who works across both countries before you add to them.

This article is general information, not tax or legal advice for your situation. Team Greenwolf.