RSU Tax Calculator
Estimate salary tax on RSU vesting and capital gains tax when you sell vested shares.
Restricted Stock Units (RSU) Tax in India
Restricted Stock Units are employer equity that becomes yours on vesting. For Indian tax residents, RSUs create two common tax events: salary tax on the fair market value when shares vest, and capital gains tax when you later sell those shares. Foreign-listed RSUs also need Schedule FA reporting while you hold them.
How to use this calculator
Start with vest-only mode. Enter the number of shares that vested and the INR fair market value per share on the vest date. Convert USD prices with the SBI TT buying rate for that date, not a random Google FX quote. Pick the marginal slab rate that applies to your total taxable income, often 30% for senior tech salaries, then add any TDS already shown on Form 16 or the payroll vest notice.
Toggle sale modelling when you plan to sell or already sold. Cost basis for capital gains is the same INR vest value that was taxed as salary, so you are not taxed again on the full sale amount. For US or other foreign shares without Indian STT, long-term treatment usually needs more than 24 months from vest. LTCG is estimated at 12.5% plus 4% cess without the Rs 1.25 lakh Section 112A exemption. Short-term gains use your slab rate.
Indian-listed RSUs with STT follow listed equity rules: more than 12 months for LTCG, 12.5% above the remaining annual exemption, and 20% STCG under Section 111A. Enter brokerage as sale expenses. Use the Schedule FA calculator separately for peak and closing foreign asset values on the calendar year, which is different from the April-March salary year.
This tool is an estimate. It does not fully model surcharge bands, foreign tax credit, sell-to-cover share counts, dividend withholding, or capital loss set-off. Match outputs with Form 16, AIS, broker cost-basis reports, and current Finance Act rates before you file.
Vest tax and sale gain
Vest perquisite value = Shares vested × FMV per share (INR on vest date) Estimated vest tax ≈ Perquisite × marginal slab rate × (1 + 4% cess) Capital gain on sale = Sale proceeds − Vest FMV (cost basis) − sale expenses Foreign shares (typical US RSUs): - Holding more than 24 months: LTCG ≈ gain × 12.5% × (1 + 4% cess) - Holding 24 months or less: STCG ≈ gain × slab rate × (1 + 4% cess) Example: 100 shares vest at ₹12,500 FMV. Perquisite = ₹12,50,000. At 30% slab + 4% cess, vest tax ≈ ₹3,90,000 before TDS credit. If sold after 26 months at ₹15,000 with no expenses: Gain = ₹2,50,000. Foreign LTCG tax ≈ ₹32,500 before cess on that tax.
Frequently Asked Questions
Are RSUs taxed twice in India?
There are two events, not a double tax on the same amount. Vesting is taxed as salary on FMV. Sale taxes only the gain above that FMV cost basis under Section 49(2AA).
What exchange rate should I use for USD RSUs?
Use the SBI Telegraphic Transfer buying rate on the vest date for perquisite valuation and on relevant sale or reporting dates for capital gains and Schedule FA conversions.
Do unvested RSUs create tax?
No. Until shares vest, you generally have a conditional promise, not ownership. Tax and Schedule FA reporting start after vesting.
Is the Rs 1.25 lakh LTCG exemption available on US RSUs?
No for typical foreign shares that are not STT-paid Indian listed equity under Section 112A. That exemption applies to eligible Indian listed equity and equity-oriented funds.
How does sell-to-cover affect the math?
Employers often sell some vested shares to fund TDS. Gross shares still vest for perquisite tax. Your broker statement shows net shares delivered. Track gross vest FMV and net shares remaining carefully.
Must I file Schedule FA for vested foreign RSUs?
Yes if you are Resident and Ordinarily Resident and held the foreign shares in the calendar year. Missing Schedule FA can attract a flat ₹10 lakh penalty under the Black Money Act even when salary TDS was paid.
Can I claim US tax credit in India?
If US tax was withheld on salary, dividends, or sale and the income is also taxed in India, you may claim foreign tax credit under the India-US DTAA after filing Form 67 on time. Rules are procedural and fact-specific.
When is RSU income shown in Form 16?
Vest-year perquisite usually appears in Form 16 Part B under salary. Confirm the amount matches your equity portal vest notices. Missing or understated RSU income is a common AIS mismatch.
What holding period makes foreign RSU gains long-term?
For foreign shares treated as unlisted for Indian capital gains, the long-term threshold is generally more than 24 months from the vest date to the sale date.
Do dividends on RSU shares need reporting?
Yes. Foreign dividends are usually taxable in India for residents, with possible credit for US withholding after Form 67. Report under the correct ITR schedules even if amounts look small.
RNOR or NRI with RSUs?
Taxability depends on residency and whether services were rendered in India. Schedule FA usually does not apply to non-residents the same way. Get residency-specific advice before copying resident rules.
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