Can NRIs trade F&O and intraday in India?

Key takeaways:

NRIs can trade equity F&O through an NRO Non-PIS account. SEBI removed the mandatory custodian requirement in July 2025, but the custodian route is still available, and brokers can now act as custodians.
NRIs cannot trade intraday in the equity cash segment. SEBI rules still bar it, including on the Non-PIS route.
Trading in commodity derivatives by NRIs is prohibited, and currency derivatives are allowed only for hedging the rupee exposure.
F&O profits are treated as business income, and brokers normally deduct TDS at 30% before surcharge and cess.
The trading profits for NRIs can generally be repatriated to a maximum of $1 million annually after tax, while higher STT rates have made F&O trading expensive from 1 April 2026.

An adage about investments says that there is no such thing as distance. For millions of Non-Resident Indians located in the US, UK, Gulf countries and elsewhere, the above statement holds true when talking about the Indian stock market.

As an NRI wondering whether you can trade Futures & Options (F&O) and do intraday trading in India, the short answer is "yes" for F&O and "no" for equity intraday. The rules are different from those applying to a resident Indian investor.

Let us dive into the details of what can be done, what cannot, how taxation is handled, etc.

The short answer

Here is the brief overview of the situation:

NRIs can trade equity F&O (futures and options on stocks and indices) via an NRO Non-PIS account
Equity intraday trading is not permitted for NRIs under SEBI rules, even through a Non-PIS account
Commodity derivatives are not allowed for NRIs, and most brokers do not offer currency derivatives to them
Since July 2025, a custodian (CP code) is no longer mandatory for NRI derivative trading, though NRIs can still trade through the custodian route
Tax Deducted at Source (TDS) on gains from F&O and intraday
Normal repatriation rules apply

Who qualifies as an NRI for trading purposes

Under FEMA regulations, an NRI is an Indian citizen who lives outside India for work, business or another purpose that suggests a stay abroad of uncertain length. Tax residency is a separate test, so it is worth confirming yours with a chartered accountant.

Holders of OCI (Overseas Citizen of India) cards are generally treated the same as NRIs for trading and investments.

The accounts to open

Before doing the first trade, 3 main types of accounts need to be set up: a bank account, a demat account, and a trading account, all of them tagged with the NRI status.

Two options are available:

PIS route (Portfolio Investment Scheme)

Funding via an NRE or NRO account
Repatriable proceeds in full (only for NRE-funded investments)
Necessary to have a designated PIS bank account where all transactions are reported to the RBI
Does not allow trading in equity derivatives; only stock delivery trading is permitted

Non-PIS route

Funding via your NRO account
Up to USD 1 million is repatriable annually per financial year after deduction of taxes
Covers equity delivery trading and F&O, and intraday and BTST trades at brokers that offer them
Has fewer restrictions and often costs less than the PIS route

If F&O or active trading is planned, the NRO Non-PIS account is the one to have. With an NRE-PIS account, only stock delivery trading is allowed.

Can NRIs trade in F&O?

Yes. NRIs can trade in equity and index derivatives (stock futures, stock options, index futures, index options) via an NRO Non-PIS account.

A few changes in favour of NRI F&O traders happened recently. Until mid-2025, NRIs also needed to appoint a custodian and have a Custodian Participant (CP) code before placing their F&O orders. In July 2025, SEBI eliminated this mandatory CP code for NRIs to trade F&O directly via their broker.

The custodian route has not disappeared. NRIs can still trade F&O through a custodian, and SEBI now allows brokers to act as custodians themselves, so the process can be handled within the broker instead of through a separate custodian.

Also, some brokers started to allow NRIs to use the pledging facility of their eligible holdings, stocks, ETFs, mutual funds, and bonds against margin in order to trade F&O.

What NRIs cannot do in F&O trading:

Trade commodity derivatives (MCX contracts) on Indian exchanges
Trade currency derivatives at most brokers; the RBI permits NRIs to use them only to hedge existing rupee exposure, through a designated bank
Use PIS accounts to trade in F&O; Non-PIS accounts only

Can NRIs trade intraday?

No. NRIs are not permitted to trade intraday in the equity cash segment. Every equity purchase must be taken to delivery, whether the account is on the PIS or Non-PIS route. If you see an intraday option on a trading platform, confirm with your broker whether it applies to NRI accounts before placing an order.

Other restrictions also apply:

Margin Trading Facility (MTF) is generally not available to NRIs
Short selling in cash equities may not be offered, so check with your broker
TDS is deducted on profits, which affects the funds you can reuse for your next trade

How F&O and trading profits are taxed for NRIs

The tax treatment depends on the type of trade:

F&O gains are treated as non-speculative business income
Equity delivery gains are treated as capital gains
Business income is taxed at your applicable slab rates

Brokers deduct TDS on your profits, usually at 30% for F&O gains, before surcharge and cess. TDS is generally not deducted when a trade results in a loss, though the exact method depends on the broker.

Your NRO account balances can be remitted post-tax deduction up to USD 1 million each financial year. In case your remittances are made on or after 1st April 2026, you would need to submit Forms 145 and 146, which have replaced Forms 15CA and 15CB respectively. Your Double Taxation Avoidance Agreements (DTAA) with your home country could also save you from paying more tax.

As the rules depend on your residency status and total Indian income, it makes sense to speak to a chartered accountant who specialises in NRI taxation.

Has STT on F&O trades gone up in 2026?

Yes. From 1 April 2026, Securities Transaction Tax (STT) on futures rose from 0.02% to 0.05%. STT on options premium and on exercised options rose to 0.15%. These rates apply to all traders, including NRIs. STT is charged on turnover, not profit, so frequent traders feel the impact the most.

Step-by-step: How to start trading

Verify your NRI status at the bank, and change your current bank account status to NRI/NRO, or create new ones. Certain brokers may not convert your trading account to an NRI one, so you may have to open a new account.
Open an NRO account. Most brokers let you link an NRO account from any bank, but check your broker's list before you apply.
Select a broker that offers NRO accounts for the segments you need (for instance, Dhan currently offers F&O for NRIs through the custodian route). Find out whether F&O is offered directly or via a custodian, and what the NRI brokerage is.
Complete your KYC procedure with your PAN card, your overseas address proof, and all documents needed for an NRI registration.
Link your demat account to the trading account and deposit funds to the NRO account.
Ask your broker which segments are activated first. Some enable delivery trading faster than F&O, while others currently offer F&O only.

Typical mistakes NRIs make

Assuming an NRE-PIS account can trade F&O; PIS accounts allow only equity delivery trading
Not planning for TDS; tax is deducted on profits, and on share sales a portion of the proceeds may be blocked temporarily, which reduces the funds available for your next trade
Ignoring restrictions linked to your country of residence; NRIs living in the US or Canada, for example, face extra requirements for mutual fund investments due to FATCA and CRS rules
Forgetting the USD 1 million annual repatriation limit and the Form 145 and 146 paperwork when moving profits abroad
Assuming intraday is allowed because the trading platform shows the option; equity intraday is not permitted for NRI accounts

Conclusion

For NRIs, F&O trading has become simpler since SEBI removed the mandatory custodian requirement in mid-2025, though the custodian route remains available and brokers can now act as custodians. Equity intraday trading, however, is still not permitted for NRIs.

But there are restrictions in this model.

Derivatives on commodities are not allowed, currency derivatives are not available with most brokers for NRIs, TDS is deducted at source, a repatriation limit exists, and high STT on F&O has increased trading cost in 2026.

It becomes very important to ensure proper setup of the account from the start itself (NRO Non-PIS, complete KYC, demat linkage) to avoid problems later on. Take advice from your broker and/or a tax expert familiar with NRI compliance.

FAQs

1. Can NRIs do F&O trading in India in 2026?

Yes, through an NRO Non-PIS account. In 2025, SEBI abolished the mandatory custodian rule.

2. Can NRIs do intraday trading in India?

No. SEBI rules do not permit NRIs to trade intraday in the equity cash segment, even through a Non-PIS account. All equity purchases must be taken to delivery.

3. Does NRI require a custodian for F&O transactions?

No, SEBI removed the mandatory CP code in July 2025. However, NRIs can still trade through the custodian route, and SEBI now allows brokers to act as custodians. Check with your broker which route it uses.

4. Can NRIs trade in commodity or currency derivatives?

No, NRIs can't trade in commodity derivatives. Even currency derivatives are not allowed in most brokers. The RBI permits them to hedge existing rupee exposure only through a designated bank.

5. Can the trading profit be repatriated?

Yes, after tax, the repatriation limit is USD 1 million per financial year from your NRO account. Your bank will ask for Form 145 and, wherever applicable, Form 146 (previously Forms 15CA and 15CB).