US Stocks, RSU & ESPP Tax Calculator (India)

How are RSUs taxed in India?

RSUs are taxed twice: as salary when they vest, on their full market value, and as a capital gain when you sell, on the rise since vesting. Take 50 RSUs vesting at $180 a share for an employee with ₹30 lakh of other salary in the new regime:

Waiting past 24 months saves ₹44,918 on this sale. The perquisite appears in your Form 16 with the rest of your salary, and your employer usually collects the tax by selling some of the vested shares (“sell to cover”). The shares sold to cover tax still count as income; the ones you keep start their holding period on the vesting date.

Which exchange rate do you use?

The SBI telegraphic transfer (TT) buying rate on the last day of the month before the month of the event: before the vesting month for the perquisite, and before the sale month for the sale value. This is Rule 206 of the Income-tax Rules, 2026, formerly Rule 115. If that day is a holiday, use the last working day before it.

Your cost for capital gains is the value already taxed as a perquisite, in rupees, so it is fixed at the vesting rate. Many employers use the vesting-day rate in payroll; check your payslip, and if the rate differs, the return should follow the rule. The 31 December rate is also used for the closing value in Schedule FA.

How is the gain on US shares taxed?

Held more than 24 months: 12.5% under Section 197 (formerly 112), plus cess, with no indexation and no ₹1.25 lakh exemption. Held 24 months or less: added to your income and taxed at your slab rate.

• 24 months, not 12: US shares are not listed on a stock exchange in India, so they are treated like unlisted shares. The 20% and 12-month rules for Indian listed shares do not apply.
• No rebate on long-term gains: the rebate under Section 156 (formerly 87A) that makes income up to ₹12 lakh tax-free does not cover gains taxed at the special 12.5% rate. If your other income is below the basic exemption (₹4 lakh in the new regime), the unused part reduces the taxable gain.
• Surcharge is capped at 15% on these gains, even when your income is above ₹2 crore.
• The rupee’s share is taxed too. In the example, ₹1,89,200 of the ₹2,46,800 gain is from the share price and ₹57,600 only from the dollar rising from ₹88.20 to ₹94.60.
• Losses: a short-term loss can be set off against any capital gain, a long-term loss only against long-term gains, and both can be carried forward for 8 years if you file on time.

How is ESPP taxed?

The discount is taxed as salary when you buy: (market price on the purchase date − price you paid) × shares. The market price becomes your cost, and the holding period starts on the purchase date. With 50 shares bought at $153 when the price is $180 (a 15% discount), the perquisite is $1,350, or ₹1,19,070 at ₹88.20, costing ₹37,150 at the 30% slab. The sale is then taxed exactly like RSUs. Money you put into the ESPP is sent abroad by your employer from your salary.

How are dividends from US stocks taxed?

The US withholds 25% under the India–US tax treaty if you have filed Form W-8BEN (30% if not). India taxes the dividend at your slab rate and gives credit for the US tax, but only up to the Indian tax on it.

To claim the credit, file Form 67 with proof of the US tax before you file your return. For low earners a dividend-paying US stock effectively costs 25% of every dividend, so growth stocks or accumulating funds can suit them better.

Do you pay any tax in the US?

Not on selling shares: the US does not tax capital gains of non-resident aliens, so the sale is taxed only in India. Only dividends are taxed in the US, at source. One risk people miss: US estate tax can apply to US shares worth more than $60,000 held by a non-resident at death, and India has no estate tax treaty with the US. Keep your broker’s nominee or beneficiary details up to date.

Reporting in Schedule FA

Every resident (and ordinarily resident) holding foreign shares, vested RSUs or a foreign broker or bank account must report them in Schedule FA of ITR-2 or ITR-3 every year, even if nothing was sold. Unvested RSUs are not reported.

• Period: the calendar year ending in the tax year (January to December), with the initial value, the peak value and the 31 December value, plus income and sale proceeds.
• Penalty: ₹10 lakh under the Black Money Act for each year missed, not applied if your foreign assets other than immovable property total ₹20 lakh or less.
• Missed it? The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 is open until 31 December 2026. If the income was taxed and only the disclosure was missed, you pay a flat ₹1 lakh for assets up to ₹5 crore; for income or assets never taxed, about 60% of the value, up to ₹1 crore. A declaration gives immunity under the Black Money Act.
• ITR form: foreign assets rule out ITR-1 and ITR-4, even if your only foreign asset is a handful of RSUs.

TCS when you send money abroad to buy US stocks

Money you send under the Liberalised Remittance Scheme to invest abroad carries TCS of 20% on the amount above ₹10 lakh in a year (Section 394 (formerly 206C)). It is not an extra tax: you get it back as a credit or refund in your return. The LRS limit is $2,50,000 a financial year. RSUs that vest involve no remittance by you; money you send to a US broker does count. For ESPP contributions sent abroad by your employer, check whether your bank collected TCS.

When to use a different calculator

• Your total income tax for the year in both regimes? Use the Income Tax Calculator.
• Gains on Indian shares, mutual funds or property? Use the Capital Gains Tax Calculator.
• Take-home pay after tax and PF? Use the In-Hand Salary Calculator.
• Old and new section numbers? See the section mapping.