When investing in US stocks as an Indian resident, the tax calculation in India involves considering both dividends earned from US stocks and capital gains from selling those stocks. Here is a breakdown of how tax is calculated for investing in US stocks in India:

Dividends from US Stocks:

Dividends earned from US stocks are taxable at a flat rate of 25% in the US according to the India-US Double Taxation Avoidance Agreement (DTAA).
In India, these dividends are also taxable as part of your total income and are subject to normal slab rates.
However, you can claim a foreign tax credit based on the taxes withheld in the US to offset your tax liability in India.
Capital Gains on Sale of US Stocks:

There is no capital gains tax applicable in the US for non-resident aliens when selling US stocks.
In India, capital gains from selling US stocks are taxed based on the holding period:
Long-term capital gains (stocks held for more than 24 months) are taxed at a rate of $60 plus cess and surcharges.
Short-term capital gains (stocks held for less than 24 months) are added to your total income and taxed based on applicable income-tax slabs.
Double Taxation Considerations:

While it may seem like double taxation since both dividends and capital gains are taxed in both countries, the DTAA between India and the USA allows you to claim foreign tax credits to avoid double taxation.
Practical challenges such as currency conversion rates need to be considered when claiming foreign tax credits.
In summary, when investing in US stocks as an Indian resident, you need to be aware of how dividends and capital gains will be taxed both in the US and India. Utilizing provisions like the DTAA and foreign tax credits can help mitigate double taxation issues.