Discuss and learn how to transfer your ESOPs/RSUs to Vested and unlock opportunities to diversify into US stocks. Share experiences, ask questions about the process, taxation, timelines, and strategies for building a global portfolio with your equity.
Hi
I wanted to check the Indian tax implications for the following scenario:
I have RSUs/ESOPs in my E*TRADE account, and I’m planning to transfer them to my Vested account. Some of these holdings have appreciated in value. I’d like to understand:
Will this transfer itself trigger any tax liability in India?
If I sell the shares after transferring to Vested, how will the capital gains be taxed?
Can I claim foreign tax credit if any tax was withheld in the U.S.?
Are there any reporting requirements I should be aware of (e.g., Form 67, Schedule FA)?
Would appreciate your guidance on how to handle this correctly from a tax compliance perspective.
Thanks,
Hello @Swapnil_Nexus_951 -
- The transfer itself will not trigger any tax liability. For ESOP/RSUs, there are two taxable events - 1) When the shares vest for RSUs/when they are exercised for ESOPs and 2) When you sell them
- Once you sell after transferring, the taxation is similar to holding foreign securities. Short-term is < 24 months and as per your income tax slab and long-term is >24 months and 12.5%
- Yes you can claim foreign tax credit by filing Form 67. We provide that to you for assets on Vested
- So the main one is ensuring to file your Schedule FA along with disclosing capital gains and dividend income. Form 67 is if you are claiming dividend tax credit
One thing to note is that when you transfer, your past transaction history does not get transferred so to calculate short-term/long-term, you will need to keep a record of when the RSUs vested or ESOPs were exercised.
Hope this helps!