Taxpayers having foreign assets or foreign income should file another applicable income tax return form containing Schedule Foreign Assets.<\/li>\n<\/ul>\nOpportunity to File Revised Return<\/strong><\/span><\/p>\n\n- If foreign assets or income were omitted in the original return, taxpayers can rectify the mistake by filing a revised return.<\/li>\n
- For AY 2025-26, the revised return can be filed up to 31 December 2025.<\/li>\n<\/ul>\n
<\/span>Tax Treatment Before Restricted Stock Units Vesting: <\/strong><\/span><\/span><\/h3>\nNo Tax Liability: Unvested restricted stock units are not owned by the employee. Are merely a future promise by the employer, do not require reporting in an income tax return, and do not require reporting in Schedule Foreign Assets. Taxation starts only on the vesting date.<\/p>\n
<\/span> Tax on Vesting of Restricted Stock Units: <\/strong><\/span><\/span><\/h3>\n\n- When restricted stock units vest: Taxable as salary income, then the fair market value of the shares on the vesting date is treated as a perquisite under “income from salary.”<\/li>\n
- Calculation: No. of Shares \u00d7 Fair Market Value on Vesting Date. The value Appears in Form 16, Is subject to TDS by the employer, Is reported under Salary Income in ITR-2<\/li>\n<\/ul>\n
<\/span> Currency Conversion for Restricted Stock Units Perquisite<\/strong><\/span><\/span><\/h3>\nFor taxation of restricted stock units vesting, use the SBI Telegraphic Transfer Buying Rate.<\/p>\n
Applicable Date: Use the telegraphic transfer buying rate\u00a0of the last day of the month preceding the month of vesting. For Example<\/p>\n
\n- Restricted stock units vested: 10 September 2025<\/li>\n
- Telegraphic Transfer Buying Rate applicable: 31 August 2025<\/li>\n<\/ul>\n
Cost of Acquisition of Restricted Stock Units<\/strong><\/span><\/p>\n\n- The cost of acquisition is Fair Market Value on the vesting date (already taxed as salary) This prevents double taxation. The amount taxed as salary becomes the purchase cost for future capital gains calculation.<\/li>\n<\/ul>\n
<\/span> After Vesting \u2013 Shares Become Normal Stocks <\/strong><\/span><\/span><\/h3>\n\n- After vesting: Shares are treated like ordinary foreign shares. Holding the shares does not attract tax, and an increase or decrease in value is not taxable until sale. No tax is payable merely because Share price rises, share price falls and shares continue to be held<\/li>\n<\/ul>\n
<\/span> Capital Gains Tax on Sale of Restricted Stock Units<\/strong><\/span><\/span><\/h3>\n\n- When vested shares are sold: Tax Head Capital Gains, not Salary Income (i.e., Cost of Acquisition: Cost = Fair Market Value taxed at vesting.<\/li>\n
- Sale Value Conversion: Convert sale proceeds into INR using SBI Telegraphic Transfer Buying Rate of the last day of month preceding the month of sale<\/li>\n
- Holding Period Rules: Short-Term Capital Gain: Holding period: Up to 24 months in this case. The tax rate will be applicable to the income tax slab rate.<\/li>\n<\/ul>\n
<\/span> Who Needs to Report Restricted Stock Units in Schedule Foreign Assets?<\/strong><\/span><\/span><\/h3>\n\n- Schedule of Foreign Assets is mandatory only for taxpayers who are residents & ordinary residents in India during the relevant financial year.<\/li>\n
- Not required for Non-Residents or Residents but Not Ordinarily Resident<\/li>\n
- Important: Schedule Foreign Assets is based on the calendar year (January 1 to December 31) and not the Indian financial year (April 1 to March 31).<\/li>\n
- For AY 2026-27, Schedule Foreign Assets will generally capture foreign assets held from 01.01.2025 to 31.12.2025.<\/li>\n<\/ul>\n
<\/span> Which RSUs Need to be Reported?<\/strong><\/span><\/span><\/h3>\n\n
The taxability of restricted stock units in India primarily depends on an individual’s residential status<\/strong> under the Income-tax Act.<\/p>\n
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