How to Report RSU & ESOP in Your ITR (AY 2026-27)
Stock compensation is taxed twice — and foreign shares add a disclosure most people miss. Here's how to get it right.
The two taxable events
- At vesting / exercise — taxed as salary perquisite. The value of the shares on the vesting date (for RSUs) or the difference between fair market value and exercise price (for ESOPs) is added to your salary and taxed at your slab rate. Your employer usually deducts TDS and shows it in Form 16.
- At sale — taxed as capital gains. When you sell, you pay capital-gains tax on the difference between the sale price and the price already taxed as perquisite (your cost basis).
Capital gains on the sale
For Indian listed shares, the usual equity rules apply — STCG 20%, LTCG 12.5% over ₹1.25 lakh (see capital gains AY 2026-27). For foreign shares (e.g. US-listed RSUs), the holding period for long-term is longer (over 24 months) and gains are taxed at 12.5% without the ₹1.25 lakh equity exemption.
The disclosure people miss: Schedule FA
If you hold foreign shares, you must report them under Schedule FA (Foreign Assets) in your ITR — even if you haven't sold them. Non-disclosure can attract heavy penalties under the Black Money Act, so this is not optional.
Watch for double taxation relief
If foreign tax was withheld (e.g. US dividend withholding), you may claim relief under the DTAA by filing Form 67 before filing your return.
RSUs/ESOPs are fiddly — let a CA file it
Perquisite, capital gains, Schedule FA and DTAA relief — we handle all of it correctly.
File with a CA →General information for AY 2026-27, not individual tax advice. Foreign-asset rules are complex — get a professional review. Reviewed by a Chartered Accountant.