SparklyBurrito
SparklyBurrito

Taxation of RSU ( Restricted Stock Units)

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

11mo ago
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JumpyHamster
JumpyHamster

Could you elaborate on section 54F provision of investment into real estate in detail. What is the catch there?

JumpyHamster
JumpyHamster

How can gains from RSU be offset in 54F

SparklyBurrito
SparklyBurrito

If RSUs are sold 24 months after holding them, then these RSUs are eligible for Long-term Capital Gains , Tax on such gains are exempt under Section 54F. 54F does have many conditions to satisfy to claim the exemption

WobblyNugget
WobblyNugget

Do we need to disclose the rsu even if they are not sold or disclose only when selling the rsu in schedule fa. Please clarify.

SparklyBurrito
SparklyBurrito

Yes , mandatory disclosure

SquishyQuokka
SquishyQuokka
Gojek11mo

It is actually helpful.

QuirkyMarshmallow
QuirkyMarshmallow

We have been asked to bring back the dollars in dividend to India within 180 days and pay tax on it. How can I spend it in dollars when I travel there?

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