For Indian investors, investing in international companies offers diversification and comes with advantages of its own in terms of protecting against currency devaluation. Some of the world’s top companies by market capitalization, particularly in the AI and technology sectors, are listed on foreign stock exchanges. However, most Indian investors are concerned about the taxation of foreign shares because Indian tax regulations require them to disclose their worldwide income to income tax authorities.
In an interview with Financial Express Online, Viram Shah, CEO of Vested Finance, discusses the importance of filing tax returns.
Vested has integrated ClearTax onto its platform. How does this partnership benefit Indian investors in US markets? Can you elaborate on the challenges investors faced previously when filing tax returns for US investments?
When we started the US investing platform, one big issue for customers was how to file taxes on their foreign investments because the investments were in USD and the fiscal year was Jan to Dec.
We built our tax module, the first such module in India, to provide easy tax reports to all our customers.
Now the ClearTax partnership takes it one step further to simplify the filing aspect as well. In one click individuals can pull all their relevant tax details including capital gains tax, and schedule of Foreign Assets and file their taxes easily.
How does Vested aim to streamline the tax filing process further for its users, beyond the integration with ClearTax?
We will continue to work on streamlining the tax filing process for our customers. This includes working with multiple partners so that customers can file their global investing taxes in a few clicks, it also includes constantly improving our in-house tax module to provide simpler and easier-to-understand reports to our customers. We are also in the process of including our India-based products in our tax module as well.
With the increasing popularity of US market investments among Indian investors, what trends have you observed in terms of investor behavior and preferences?
Investors continue to be interested in large tech along with Tesla and Nvidia. Quite a few of our customers are also saving up for future education plans and saving in USD helps remove the currency risk from their savings.
The key thing today is a lack of awareness around the need to diversify globally and around the fact that the process to do it is easy in today’s world.
Considering the current economic climate and global events, what advice would you give to investors interested in diversifying their portfolios with US market investments?
Now more than ever, uncertainty is increasing across the world. Creating a diversified portfolio is becoming more and more important. One thing that investors must understand is that investing via the US markets does not only provide exposure to the US economy, by investing in global brands one is essentially getting a globally diversified company.
Further, there are options to even directly invest in the global markets via ETFs like for e.g. the MCHI which invests in China or via ADRs of companies like Toyota, BYD, Adidas, LVMH and more.