Updated for FY 2026-27 (AY 2027-28)
RSU Tax Calculator India
Work out exactly what your Restricted Stock Units cost in tax — the perquisite tax when they vest and the capital-gains tax when you sell — with the correct rules for US/foreign vs Indian-listed shares.
On these 500 RSUs you pay about ₹36.66 L in total tax and keep ₹66.54 L of ₹1.03 Cr.
₹36,65,610
total tax · effective rate 35.5% on the full value
Hold 7 more months to save ₹3.31 L
Sell after 25 months from vesting and this gain becomes long-term — taxed at a flat 12.5% instead of your slab rate. That single decision saves roughly ₹3,31,240 in capital-gains tax.
Estimate for FY 2026-27. Vesting tax is the marginal income tax your RSU perquisite adds, including surcharge and 4% cess; foreign FMV is converted at the ₹/$ rate you enter (use the SBI TTBR on the vesting date for filing). Capital-gains surcharge is capped at 15%. Marginal relief and any DTAA / foreign tax credit on US-withheld tax are not modelled. Verify against your Form 16 / 12BA and a tax professional before filing.
How RSUs are taxed in India — the two stages
A Restricted Stock Unit is a promise from your employer to give you shares once a vesting condition (usually time served) is met. In India it is taxed at two separate moments, and confusing them is the single most common RSU mistake. Nothing happens at grant — a promise of future shares is not yet income. The tax begins at vesting and finishes at sale.
Stage 1 — vesting (taxed as salary). On the day your RSUs vest, the fair market value of those shares is treated as a perquisite under Section 17(2)(vi) of the Income Tax Act. Since you paid nothing for them, the entire FMV is added to your salary and taxed at your slab rate — which, stacked on a software salary, usually means the 30% bracket plus surcharge and 4% cess. Your employer settles this through TDS, most often by "sell-to-cover": selling enough of the freshly vested shares to pay the tax and crediting you the rest.
Stage 2 — sale (taxed as capital gains). When you later sell, only the appreciation since vesting is taxed again. The FMV that was already taxed as salary becomes your cost basis, so the capital gain is simply (sale price − vesting FMV) × shares. The holding period that decides short- vs long-term runs from the vesting date, not the grant date.
Why US/foreign RSUs follow completely different rules
Most Indian tech employees hold RSUs of a US parent — Google, Microsoft, Amazon, Meta. Even though those shares trade on the Nasdaq, Indian tax law treats foreign-company shares as unlisted. That flips three things versus an Indian-listed stock:
- Long-term needs 24 months, not 12. Sell a US RSU at 23 months and it is still short-term.
- Short-term gains are taxed at your slab rate (up to 30% + surcharge + cess), not the flat 20% that applies to listed shares.
- Long-term gains are a flat 12.5% under Section 112 — with no ₹1.25 lakh exemption (that exemption only exists for listed shares under Section 112A).
This is exactly the distinction the calculator bakes in: toggle between US / foreign company and Indian-listed and watch the holding-period line and the capital-gains rate change. For foreign shares it also converts your FMV and sale price from dollars — for your actual ITR, use the SBI Telegraphic Transfer Buying Rate on the vesting date, as prescribed under Rule 26.
Worked example: 500 US RSUs, sold at 18 months
Setup: 500 RSUs of a US-listed employer vest at a FMV of $200 (₹/$ 85, so ₹17,000 a share). You already earn ₹25 lakh in salary and are on the new regime. Eighteen months later you sell at $240 (₹/$ 86, so ₹20,640 a share).
Stage 1 — vesting: perquisite = 500 × ₹17,000 = ₹85,00,000, added to salary. Stacked on a ₹25 lakh income the combined total crosses ₹1 crore, so the 30% bracket, a 15% surcharge and 4% cess all apply — the marginal tax the RSU adds is about ₹31 lakh, collected via sell-to-cover.
Stage 2 — sale: gain = (₹20,640 − ₹17,000) × 500 = ₹18,20,000. At 18 months a foreign share is still short-term, so the gain is added to your sale-year income and taxed at your slab — about ₹5.7 lakh. Had you waited past 24 months, the same gain would be long-term at a flat 12.5% — about ₹2.4 lakh, a saving of around ₹3.3 lakh from one timing decision.
The lesson: the vesting tax is unavoidable and large — it is ordinary salary tax on a big number. The lever you actually control is the sale: crossing the 24-month line on foreign shares (or 12 months on Indian-listed ones) is often worth lakhs. Move the holding-period slider above and watch the long-term saving appear.
Frequently asked questions
How are RSUs taxed in India?
RSUs are taxed at two points. First, when they vest: the fair market value (FMV) of the shares on the vesting date is treated as a perquisite under Section 17(2)(vi), added to your salary and taxed at your income-tax slab rate (your employer usually deducts this via 'sell-to-cover', selling some shares to pay the TDS). Second, when you sell: any gain above the FMV at vesting is taxed as capital gains. There is no tax when RSUs are merely granted.
Are RSUs of a US company (Google, Microsoft, Amazon) taxed differently in India?
Yes — and this is where most people get it wrong. Shares of a foreign company are treated as UNLISTED in India, even though they trade on the Nasdaq or NYSE. That changes the capital-gains rules: the long-term holding period is 24 months (not 12), short-term gains are taxed at your slab rate (not a flat 20%), and long-term gains are taxed at a flat 12.5% under Section 112 with no ₹1.25 lakh exemption. Pick 'US / foreign company' in the calculator to apply these rules.
What is the holding period for long-term capital gains on RSUs?
It depends on where the shares are listed. For shares of an Indian-listed company (NSE/BSE), the gain is long-term after 12 months and taxed at 12.5% on gains above ₹1.25 lakh a year. For foreign-company shares (treated as unlisted), the gain is long-term only after 24 months, then taxed at a flat 12.5%. The clock starts from the vesting date, not the grant date.
How is the capital gain on RSUs calculated?
Your cost basis is the FMV that was already taxed as salary at vesting — not zero. So the capital gain is (sale price − FMV at vesting) × number of shares. Only that appreciation is taxed again; the FMV portion was already taxed as perquisite, which is why this calculator separates the two stages so you don't double-count.
Do I need to declare foreign RSUs in my ITR?
Yes. If you are Resident and Ordinarily Resident, foreign shares received via RSUs must be disclosed in Schedule FA (Foreign Assets) of ITR-2 or ITR-3 — including the entity, country, acquisition date and peak value. Note that Schedule FA follows the calendar year (Jan–Dec), not the financial year. Non-disclosure can attract penalties under the Black Money Act, separate from any income tax.
Can I avoid double taxation if my US employer already withheld tax?
If tax was withheld in the US on the same income, you can claim a Foreign Tax Credit in India under the India–US DTAA by filing Form 67 before your ITR due date — capped at the Indian tax on that income. This calculator shows your India-side liability before any such credit, so treat its vesting-tax figure as the gross amount and reduce it by any eligible foreign tax credit.
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