What did you do with your RSUs after it got vested ?

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Program Manager

RSU- Grapevine

Welcome to Indian Startups's Private Community

I had a very basic doubt.
For people who've exercised their stock options or have had some similar experience with this in the past, what's best way to limit the tax liability?

My company is registered in the US - would i have to pay taxes to both the governments?

Thanks in advance and have a great day ahead!

Tax liability for vested stock options

Software Engineer

Welcome to Software Engineers's Private Community

I have around 2 years of experience.
1) 10 months in pervious company with 6 month internship and 4 month full time.
2) 1 year 1 month in current company.

I recently applied for a company and was offered an MTS role. ( 18 cash, 50 private RSUs + additional benefits) Total CTC is approximately 34 LPA

The offer sounds overwhelmingly good based on current market standards but when I checked company’s stock price in secondary markets, they are worth less than 50% of what was quoted by the recruiter.

Right now I am a bit skeptical on the stock price as the company has not yet gone public but they plan to in next couple of years.

Not sharing company and personal details for obvious reasons.

Thoughts on my offer?

Software Developer

I am not really good with finances, my personal portfolio size is around 15lacs, and other than that my 11 lacs worth of Amazon RSUs are vested.

I have genuine question on how do you guys manage RSUs ?
Do you take it out and invest somewhere else or just let it stay there in your company broker account.

Can someone help me in managing it better.

A bit more context about me if that helps:
* currently working as SDE 2 promoted 2 quarters back only ( before that TC was around 21) and current TC is around 49lacs

How do you guys manage your RSUs ?

Hi,

I have been working in the Software Industry for the past 9 years. I feel like I have made a good use of my time and money and maybe some of my lessons can help you folks as well. Recently did a calculation for my NW and I am happy and proud to see my NW crossing 2CR+. I have 0 debt and do not own a house. Here is how my portfolio look like

TC: 1.3 Cr
YOE: 9

I am happy to do an AMA. Ask me anything about tech, career, love, marriage, money management, therapy, songs and movies.
#Ask Me Anything #ama #amazon #atlassian #google #startups #bengaluru #networth #money management #finance #india

Sorry if delay in responses, I'll answer all your questions eventually.

[AMA] 9 years in Software Engineering in India. NW 2.5Cr

I see a lot of similar questions and I'll try to answer them here.

>>>>>>CTC Progression<<<<

My current CTC is 1.3CR . 50% is cash, 50% is stocks.

Here is my CTC progression over the years

1st - 12L
2nd - 12L (Switched Companies)
3rd - 15L 
4th - 24L (Switched companies)
5th - 42L (Switched Companies)
6th - 48L
7th - 66L
8th - 72L
9th - 1.3Cr (Switched Companies)

As you can see I almost everytimg doubled my compensation when I switched my companies. But there are reasons to stay at a company as well. If you are learning and are able to handle different problems at scale, stay. When you feel stuck, leave and look for better opportunities. I have never switched job to get more money. I love CS. I have been coding since 15 years. What made me switch was either bad managers, uninteresting problems not visibility of learning and growth.

Just wondering, say if you join a company and they grant you $40,000 dollars worth of RSUs. These are unvested and 6 months later they do mass layoff and your role is eliminated. 
What happens to those RSUs? Do they provide accelerated vesting and give you those shares or will it expire?

Appreciate your inputs regarding this.

What happens to RSUs after mass layoffs?

Analyst

Started working in 2017 (Graduation: Tier 2 College)  in hand salary: 28K per Month. Worked for 2.5yrs, had big dreams, didn’t knew what to do, how do I 10x my salary, saw my manager 40yrs old earning 25LPA in the same company. Realised I don’t want to do this for the next 20yrs and the reach at 25LPA. Started preparing for UPSC (wanted to make it big) realised within 6 months, this is not my cup of tea, appeared for MBA entrance, cleared the exam joined Tier 1 MBA, post MBA: 25LPA + XX Esops in next two years at 1.2Cr CTC inc ESOPs. 

Before 2030 plan to achieve FIRE with 8Cr networth. By 2040 make it 100Cr and retire. Chill at beach with beer in hand and two other friends. 

What’s your story, do share those goldmine inspirational stories!!

Story of Middle Class guy from 3.5LPA CTC to 1.2Cr CTC (46Base + 72Esops) in 4 yrs

Are you considering 72L esops of razorpay as your own networth? 🤔🤔

Senior Product Manager

Hi folks, 

I'm Kashish, the CEO of EquityList and Founder of Cloud Capital which I run as a solo GP.
A little bit about what we do: 

EquityList is a full-stack equity management platform by AngelList India. Companies across India, US and Singapore use EquityList to manage their cap table, stock options (ESOP/SAR), shareholders, and related compliances. Managing equity for 10k+ stakeholders, 250+ companies and ~$1B in stock options.

Cloud Capital has deployed $8M+ in 55+ startups such as Airmeet, Rupifi, Orange Health, DevRev, ZET (OneCode) and others. I've also angel invested in startups such as OSlash, Atlys, Chronicle, Even Healthcare and others.

Excited to do this AMA, and look forward to answering any of your questions about ESOPs, cap table management, investing, entrepreneurship, and more!

LinkedIn: https://www.linkedin.com/in/kashisharma

Live AMA: Hey everyone, I'm Kashish, CEO of EquityList. Ask me anything!

Hi,

Here's a quick summary for taxation of RSU's.
This is for employees who get stocks of their parent companies listed abroad as part of their salary package.

The RSU are taxed after clubbing with the salary as a perquisite and thereafter in Capital gains arising on account of holding such shares.

At the time of grant: No tax liability.

At the time of vesting: The  fair market value of the share on the date of vesting is taxed at the slab rate by the employer by selling the shares to cover the tax liability.
Example - If you have 10 RSU vested, your employer will sell 3 RSU to cover the tax liability and will give you 7 RSU.

At the time of sale: After vesting, the difference between fair market value on the date of vesting and selling price is taxed as capital gain as below:
a) Holding period of more than 24 months,  long-term capital gain, taxable at 20% with post-indexation benefit. 
b) If the period is lesser, it is short-term gain taxable at the slab rate.

At the time of filing ITR, you should declare the holding of foreign shares in schedule FA

Taxation of RSU ( Restricted Stock Units)

Chartered Accountant

Note:
1.1. The vested RSUs given by the employer are mentioned under the nature of perquisites in Form 16. The tax is already paid for it and mentioned in Form 16 as well. The same info is reflected on the ASI website.
1.2. None of the vested RSUs were sold historically.
1.3. No dividend income comes from the vested RSUs.

My doubts
2.1. For this case, do we need to disclose vested RSUs in Schedule FA form in ITR2?
2.2. If I need to disclose them, I did not know about this and filed ITR1, which was processed for the last financial year. I am yet to file for this financial year. Can I disclose all the vested RSUs from 2022 and 2023 in the current FY 2023-2024 filing?

Other Annoyances
3.1. There is a conflict among CAs as well. Some CAs say we need to disclose only when selling and not while holding, as taxes for that are already paid. Other CAs say we need to disclose even if we are holding and even if taxes are paid.
3.2. If the holdings are required to be disclosed, I wish the tax portal could throw an error in the UI if trying to submit the ITR without disclosing Schedule FA. As the IT Department has access to our Form 16, the IT portal can extract data from Form 16, check if it has RSUs mentioned, determine if the stock of the company is listed on a US stock exchange, and mark the Schedule FA form as mandatory. I don't think it is very complicated to implement this feature.

People having RSUs, please clarify

Consider this scenario:

A well established publicly trading company is giving you $45000 (120 units) worth of RSUs, with vesting schedule of 4 years. The work culture seems stressful (asked from ex employees) and they have a 4 day work from office where they track your badge attendence. 

And a Series B startup is giving you $45000 (9000 units) worth of ESOPs with vesting schedule of 4 years. It has scope to go for Series C and D fundings and even IPO in 4-5 years. The company is flexible in remote/office setting and has some perks like: once a quarter a selected Monday will be holiday, yearly offsite to exotic places.

Which one would you prefer RSUs or ESOPs? and why? Kindly explain why your preferences.

ESOPs or RSUs? Which would you choose?

Does RSU also be considered while negotiating when switching.
Do they consider the present tc as itself with stocks while offering a package ?

Does RSU also be considered while negotiating when switching.

My CTC break up is as follows:

Base: 19.17 L
Sign on bonus (1st year): 6.47 L
Sign on bonus (2nd year): 5.16 L
RSUs: 15.56 L

What is gonna be my in hand salary for the first year? Second year? And then on?

SDE 1 fresher comp at Amazon

Hi GV'ers, I wanted some help with understanding how RSUs should be calculated in the CTC, especially when looking to switch to another company. Here's my thing:

On joining, I was allotted ~30k USD worth of RSUs to be vested over 4 years. ¼ after completing 1 year, then equally distributed over every quarter. Now, the 30k USD was converted to units immediately, and now the units have tripled in price.

Now, does that mean my effective CTC is the base + original price of RSUs for 1 year, or should I consider the updated price? Should I only consider what has been vested so far only, then divide by YoE? What about other RSU grants for later years? I have received an additional 10k, over 4 years, again in my second year, and again in my 3rd year. I'm planning to stay for 4 years for the original vesting schedule to complete, as the other RSU grants didn't give high enough units to make me stay.

There's also 7(+5)L health insurance that's tied here as part of other benefits, but nothing else is monetary, if that helps.

RSU

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