Short answer: For a US-company RSU, Indian tax is computed entirely in rupees. At vest, convert the USD FMV at the RBI reference rate / telegraphic transfer (TT) buying rate on the vest date to compute the perquisite under s.17(2)(vi) ITA 1961. At sale, the capital gain is (sale value in INR − vest FMV in INR) under s.45/48, using the same INR cost basis. Two annual compliance items follow: Schedule FA to disclose the foreign shares (at peak balance during the year) and Form 67, filed before the ITR due date, to claim the foreign tax credit for US withholding.

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The five-step roadmap

Step	Event	Action
1	Vest	Convert USD FMV at the RBI TT buying rate on vest date
2	Perquisite	(INR FMV − exercise price) × shares → salary, TDS
3	Sale	Capital gain = (sale INR − vest INR FMV) × shares
4	Schedule FA	Disclose foreign shares held during the year at peak balance
5	Form 67	Claim foreign tax credit for US withholding — before the ITR due date

The FX rate that matters

The conversion rate is not your bank's fancy rate. For foreign-currency perquisites and capital gains, the operative figure is the telegraphic transfer buying rate published by the State Bank of India (the RBI reference rate family) on the relevant date — vest date for the perquisite, sale date for the sale proceeds. Practically:

Vest: perquisite per share = (USD FMV on vest date) × (TT buying rate on vest date).
Sale: sale proceeds = (USD sale price) × (TT buying rate on sale date); cost = (USD FMV at vest) × (TT buying rate on vest date).

The same USD share price can give a different INR figure on different dates — the FX difference is not separately carved out; the whole INR result is taxed as perquisite or capital gain.

Worked example: Nidhi's US RSUs

Persona: Nidhi, Indian-resident ROR, 100 RSUs vest on 15 September 2025. USD FMV at vest $50; TT buying rate ₹83.50. She sells all 100 on 20 November 2026 at $62; TT buying rate ₹84.00 (~14 months later).

Step 1 — Perquisite (FY 2025-26):

100 × $50 × ₹83.50 = ₹4,17,500 → added to salary; employer TDS (or self-declare if no Indian payroll).

Step 2 — Cost basis: ₹4,17,500 (s.49(2AA)).

Step 3 — Capital gain (FY 2026-27):

Sale = 100 × $62 × ₹84.00 = ₹5,20,800

Less cost = ₹4,17,500

Capital gain = ₹1,03,300

Step 4 — Rate: held ~14 months. On the 12-month interpretation for foreign RSUs, LTCG at 12.5% (s.112, no exemption since no STT): ₹1,03,300 × 12.5% ≈ ₹12,913. On the strict 24-month s.2(42A) reading, a 14-month sale is short-term at slab rate. Confirm before filing.

Step 5 — Schedule FA (both years):

FY 2025-26: disclose 100 shares (acquired 15 Sep 2025, cost ₹4,17,500) and the US brokerage account — at peak balance during the year.

FY 2026-27: disclose the shares held and the sale; report the ₹1,03,300 gain as foreign-source income.

Step 6 — Form 67 / FTC:

Assume the US withheld tax on the vest perquisite (e.g., 22% supplemental on $5,000 = $1,100 ≈ ₹91,850).

Indian tax on the ₹4,17,500 perquisite at, say, 30% = ₹1,25,250.

Foreign tax credit = lower of (₹91,850, ₹1,25,250) = ₹91,850.

File Form 67 (Rule 128) before the ITR due date; claim the credit in Schedule TR. Missing the Form 67 deadline forfeits the credit (per settled ITAT position).

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ROR vs RNOR and Schedule FA

Schedule FA applies to resident and ordinarily resident (ROR) individuals. A Resident but Not Ordinarily Resident (RNOR) is generally not required to disclose foreign assets acquired while non-resident — but the income from those assets remains taxable, and RNOR status itself is temporary (it lasts at most a few years before you become ROR). The practical effect for US-tech employees who were previously non-resident: the year you become ROR, foreign shares and the US brokerage account acquired earlier are brought into the Schedule FA net, and each asset is reported at its peak value for that year. Confirm your residential status for the relevant FY before deciding what to disclose — a wrong self-classification either over-discloses (harmless) or under-discloses (the ₹10 lakh-per-asset exposure).

The FX error to avoid

The most common INR-conversion mistake is mixing dates — applying the sale-date rate to the vest value or vice versa. Use the TT buying rate on the vest date for the perquisite and cost basis, and the TT buying rate on the sale date for the sale proceeds. The two rates are locked to their own events, and the FX difference is not separately carved out; the whole INR result is taxed as perquisite or capital gain.

Frequently Asked Questions

1. Which FX rate do I use for US RSU vest?

The RBI reference rate / telegraphic transfer (TT) buying rate on the vest date (SBI TT buying rate). Your bank's remittance rate is not the operative figure for the perquisite.

2. What is the cost basis for a US RSU sale?

The INR value of the FMV at vest (USD FMV × TT buying rate on vest date) — per s.49(2AA). The capital gain is sale INR minus this.

3. What goes in Schedule FA for RSUs?

The foreign brokerage account (Part A2) and the shares (Part B) — with acquisition date, cost, and peak balance/value during the year, converted to INR. Non-disclosure attracts a ₹10 lakh penalty per asset per year under the Black Money Act.

4. When must I file Form 67 for the foreign tax credit?

On or before the ITR due date. Filing Form 67 after the deadline is treated as a bar to the credit in multiple ITAT decisions. File it electronically on the portal before submitting the ITR.

5. Can I claim a credit for US state tax?

Generally no — the credit under Rule 128 is for foreign tax attributable to the income; state tax is usually not creditable unless it meets the conditions. Confirm with your CA.

6. Do I need to declare unvested RSUs in Schedule FA?

There is no specific CBDT guidance on unvested RSUs; the conservative approach is to disclose them as a foreign asset at nil value. Vested but unsold shares must be disclosed. See Unvested RSU on Schedule FA.

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Compute the INR numbers yourself

Use the Foreign RSU Calculator — enter vest FMV, vest-date and sale-date FX rates, sale price and shares — and it produces the perquisite, cost basis, capital gain, and the FTC cap for Form 67 in one pass.

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Last verified: 2026-08-08.
Sources: Sections 17(2)(vi), 45, 48, 49(2AA), 90, 2(42A) ITA 1961; Income-tax Rules, 1962 (Rules 3(8), 128); SBI TT buying rate / RBI reference rate; India-US DTAA (Art. 15); Black Money Act 2015 (s.43).
Reviewer: pending CA sign-off. Draft status — do not publish before CA review.: holding period for foreign-listed shares; creditable US tax types.

Topics:RSUforeign incomeSchedule FAForm 67

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