RSU/ESOP Tax Calculator
See the full tax picture on your equity compensation — perquisite tax when shares vest or options are exercised, plus capital gains tax when you eventually sell.
At Vesting
At Sale
Total Tax (Perquisite + Capital Gains)
Net proceeds after all tax and exercise cost: ₹3.36 L
1. Perquisite Tax (at Vesting)
Effective rate on this perquisite: 21.2% — your employer should deduct this as TDS.
2. Capital Gains Tax (at Sale)
Long-term equity gains are exempt up to 1,25,000/year, taxed at 12.5% above that, plus 4% cess.
Total sale proceeds
₹4 L
Exercise cost paid
₹0
Simplified model for a single vesting tranche. Multiple tranches vesting on different dates each need this calculation run separately with their own FMV and holding period.
How RSU and ESOP Taxation Works in India
Equity compensation is taxed at two distinct points, and it's easy to underestimate the first one. When RSUs vest or ESOPs are exercised, the fair market value of the shares on that date (minus anything you paid to acquire them) is treated exactly like a cash bonus — added to your salary and taxed at your slab rate, with your employer deducting TDS immediately. This happens whether or not you sell the shares, which can create a real cash-flow problem if a large tranche vests and you haven't set aside money for the tax.
The second tax event happens only when you actually sell. At that point, the vesting-date FMV becomes your cost basis, and the difference between your sale price and that basis is a capital gain — short-term or long-term depending on how long you've held the shares since vesting. For Indian-listed shares, the long-term threshold is 12 months; for foreign or unlisted company shares (common with US tech RSUs), it's 24 months, and the tax treatment differs slightly.
Frequently Asked Questions
When are RSUs taxed in India — at vesting or at sale?
Both. At vesting, the fair market value of the shares is treated as a perquisite and added to your salary income, taxed at your slab rate — this is the first tax event. At sale, any gain or loss compared to that vesting-date value is taxed separately as a capital gain, based on how long you held the shares after vesting.
How is ESOP tax different from RSU tax?
The mechanics are the same, but ESOPs (stock options) require you to pay an exercise price to convert the option into an actual share, while RSUs vest directly as shares at no cost. The perquisite value for ESOPs is FMV minus the exercise price you paid; for RSUs, since there's no exercise price, the perquisite is simply the full FMV at vesting.
What if my RSUs are from a US company listed only on Nasdaq or NYSE?
Since the shares aren't listed on any recognized Indian stock exchange, they're treated as unlisted shares for Indian capital gains purposes — long-term status requires a 24-month holding period (not 12), and the tax treatment differs slightly from Indian-listed equity. Select "Foreign / unlisted company" in the calculator to model this correctly.
Does my employer deduct tax on RSU vesting automatically?
Yes — Indian employers are required to deduct TDS on the perquisite value at the time of vesting, treating it as part of your salary for that month. This can create a large one-time TDS deduction in the month RSUs vest, even though you may not have sold any shares yet to generate cash.
Can I avoid double taxation if I already paid tax on RSUs abroad?
If you were taxed on the same RSU income by a foreign country (common for expats or those who relocated during the vesting period), a DTAA (Double Taxation Avoidance Agreement) between India and that country may let you claim foreign tax credit against your Indian liability. This isn't modeled in the calculator — it depends on your specific residency history and the treaty terms.