Hyderabad Employees Selling Foreign RSUs: Capital Gains, Exchange Rates and Timing

Hyderabad's large base of employees at global technology companies and capability centres means many people hold RSUs from foreign parent companies. Selling them triggers Indian capital gains tax, with a few points specific to foreign shares.

Your Cost Is the Vesting Value

RSUs are taxed as salary when they vest. The fair market value taxed then becomes your cost for capital gains, so you only pay capital gains tax on the increase after vesting.

Holding Period

Foreign shares are treated as unlisted in India, even if they trade on NASDAQ or NYSE. They're long-term only after 24 months from vesting, taxed at 12.5% since July 2024. Shares sold within 24 months are short-term, taxed at slab rates — often 30% plus surcharge and cess for senior employees.

Exchange Rates

Convert the cost and sale price into rupees using the rates prescribed by the rules, generally the SBI telegraphic transfer buying rate for the relevant dates. Rupee depreciation increases the rupee gain even when the dollar gain is small.

Sell-to-cover and Lots

Brokers often sell some shares at vesting to cover tax. Track each lot's vesting date and value, and match sales to the right lots.

Advance Tax

Tax on gains isn't deducted at source, so pay advance tax in the instalment following the sale to avoid interest.

Bringing Money Home

Sale proceeds remitted to India don't create further tax, but keep brokerage statements and bank records. Unremitted proceeds held abroad must be reported in Schedule FA.

Reporting

Report gains in the capital gains schedule, dividends as income, foreign tax credit through Form 67, and the account and shares in Schedule FA.

Getting Help

Think Filing computes RSU gains, plans sale timing and files returns for Hyderabad employees.