Moment guide · FY 2026-27

I have RSUs or ESPP from a foreign employer

When do I pay Indian tax on foreign RSUs?

Sec 17(2)(vi)Sec 49Sec 112ASec Schedule FASec FEMAVerified 2026-08-11

Foreign RSUs have two taxable events: the FMV minus price paid at vesting is salary income if you are a resident then, and the later sale is a capital gain using that FMV as cost. If you are a non-resident at vesting under a foreign employer, the perquisite is generally outside Indian tax. File Form 67 before the ITR due date for foreign tax credit, disclose holdings in Schedule FA, and repatriate proceeds through banking channels.

Your legitimate options

Every route the statute actually gives you — with its condition, cap and deadline.

Route	Condition	Cap / deadline
Perquisite at vesting	If you are a resident when the RSU vests, the FMV minus what you paid is salary income at slab	Taxable in the year of vesting even if you sell nothing
Capital gain at sale	The sale later is a capital gain using the FMV already taxed as cost	Foreign shares follow unlisted-asset rules — no 112A exemption
NRI at vesting	If you are a non-resident when RSUs vest under a foreign employer, the perquisite is generally not taxable in India	Gains on sale while NRI may still be taxable if sourced in India — check the DTAA

The #1 trap

Missing that vesting and sale are two separate events with different rules — and that if you were a resident at vesting, the perquisite is taxable even if you sell nothing. The Form 67 filing for foreign tax credit must happen before the ITR due date, and foreign holdings must be disclosed in Schedule FA; repatriation of sale proceeds must go through banking channels under FEMA.

The decision path

Follow it top to bottom — the first condition that matches is your answer.

IF you are a resident when RSUs vest → the FMV minus price paid is a salary perquisite u/s 17(2)(vi), taxed at slab.
IF you sell the shares later → compute capital gains using the FMV already taxed as cost.
IF you are an NRI when they vest under a foreign employer → the perquisite is generally not taxable in India.
IF you paid tax abroad → file Form 67 before the ITR due date to claim the foreign tax credit.
IF you hold foreign shares → disclose them in Schedule FA from your first ROR year.
IF you repatriate the sale proceeds → use banking channels per FEMA; keep the inward remittance certificates. [VERDICT: two events — vesting perquisite and sale gain — each with its own timing.]

Worked example

Neha, Bengaluru-based engineer with US parent-company RSUs

Neha works in Bengaluru for the Indian arm of a US company. In March 2026, 500 RSUs vest at an FMV of $60 each when she is a resident of India. The fair market value is 500 multiplied by $60, which is $30,000, converted at the SBI TT buying rate of ₹86 per dollar, giving ₹25,80,000. She paid nothing for the RSUs, so the entire ₹25,80,000 is a salary perquisite under section 17(2)(vi), taxable at her slab rate in the year of vesting, with TDS handled by her Indian employer's payroll or paid as advance tax. Her cost basis for the later sale is the ₹25,80,000 FMV already taxed. In July 2026 she sells 300 shares at $75 each, receiving $22,500, which is ₹19,35,000. The gain is ₹19,35,000 minus the cost of 300 shares, which is 300/500 of ₹25,80,000, equal to ₹15,48,000, giving a gain of ₹3,87,000. Because the shares are foreign-listed, they follow the unlisted-asset rules — no section 112A exemption — and held over 24 months they are LTCG at 12.5%. The US employer withholds 10% US tax on the vesting, and Neha claims the foreign tax credit by filing Form 67 before the ITR due date; a late Form 67 means the credit is lost. She discloses the US brokerage account and shares in Schedule FA. When she repatriates the sale proceeds, she brings them through her bank under FEMA and keeps the inward remittance certificates. A quick call with us dials in the final figure. Neha also checks the RSU statement for the withholding: the US employer withholds US tax at vesting, and she claims that foreign tax credit via Form 67, which must be filed before the ITR due date. The vesting perquisite is computed on the FMV on the vesting date, and if the market price moves between vesting and the payroll run, the perquisite value used by the employer is the vesting-date FMV. If she sells the shares in the same financial year as the vesting, the two events are still reported separately: the perquisite in the salary schedule and the capital gain in the capital-gains schedule. If she holds the shares for more than 24 months from the vesting date, the gain is long-term at 12.5% under the unlisted-asset rules, because foreign shares do not get the 112A treatment. A quick call with us dials in the final figure.

Claims influencers make about this moment

Trap“RSUs from a foreign employer are tax-free in India”

Questions people actually ask

When is the RSU perquisite taxed?

At vesting, if you are a resident of India at that time — the FMV minus what you paid is salary income under section 17(2)(vi), taxed in the vesting year.

How is the later sale taxed?

The sale is a capital gain using the FMV already taxed as cost. Foreign shares follow unlisted-asset rules; held over 24 months gives LTCG at 12.5%.

Are NRI RSUs taxable in India?

If you are a non-resident at vesting under a foreign employer, the perquisite is generally not taxable in India, though gains on a later sale may be — check the applicable DTAA.

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Sections: 17(2)(vi), 49, 112A, Schedule FA, FEMA · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).