When selling RSUs (Restricted Stock Units) and ESPPs (Employee Stock Purchase Plans), particularly foreign shares, keep the following points in mind:
1. Short-Term Capital Gains (STCG): If you sell the shares within 24 months of purchase, any gains will be taxed at your applicable slab rates.
2. Long-Term Capital Gains (LTCG): If the shares are held for more than 24 months, the gains will be taxed at a concessional rate of 12.5%.
3. For ESPP: The Fair Market Value (FMV) on the vesting date is considered the acquisition cost for calculating capital gains.
Many overlook this and end up with incorrect calculations, leading to losses.
1. Exchange Rate for Capital Gains: The conversion of sale proceeds and acquisition cost into Indian Rupees must be done using the Telegraphic Transfer Buying Rate (TTBR) on the specified date.
2. Specified Date for Capital Gains: The exchange rate to be used is the rate on the last day of the month immediately preceding the date of the sale of shares).
By using the correct exchange rates, you ensure proper calculation of capital gains and avoid compliance issues. Connect with the best CA in India, CA Pranay Bafna for RSU and ESPP taxation. Microsoft Google LinkedIn Amazon Amazon Web Services (AWS) Uber Oracle Apple Adobe Salesforce
Comments