Firstly give information on your residential status whether or u s. What is RSU This will have to be examined in the light of Indo Us treaty for double taxation avoidance.
Capital Gains Tax on RSUs on stocks listed in US
Hi. I was previously employed at EA Games India, Hyderabad where I received 50 RSUs of Electronic Arts Inc. NASDAQ: EA. I have an account in www.etrade.com where I manage the stocks. However, on received the stocks, 20% of it (10 shares) were deducted as taxes towards the US government. However, when I created the etrade account, I had to fill a W8BEN form for the Double Taxation Treaty that India and US have. Last year also, I got 50 shares (40 after taxes) which I sold immediately. But when I sold the stocks, I was again taxed in India with Short Term Capital Gains 20% rate. My question is, do I need to pay taxes both in US and India for these RSUs when India has a Double Taxation Avoidance Treaty with the US? If not, how can I claim tax benefit.
Asked 8 years ago in Income Tax
Hello Sir, I am currently living in India. I've never worked abroad. According to Investopedia: DEFINITION OF 'RESTRICTED STOCK UNIT' (RSU) Compensation offered by an employer to an employee in the form of company stock. The employee does not receive the stock immediately, but instead receives it according to a vesting plan and distribution schedule after achieving required performance milestones or upon remaining with the employer for a particular length of time. The restricted stock units (RSU) are assigned a fair market value when they vest. Upon vesting, they are considered income, and a portion of the shares are withheld to pay income taxes. The employee receives the remaining shares and can sell them at any time.
Asked 8 years ago
Under Indian law it is considered as Employee Stock Option and they are not taxed when they are vested but when thyey are sold you.
You can claim credit for tax deducted by U S authorities from the income tax payable in India and balance amount after deduction is your liability under Indian income tax Act
If the query is already answered then if you again require I will give my view.
You can claim relief for the tax already paid in US. You need to pay the difference of tax rate in India and US.
RSU are offered to many employees, these are common and in most of the cases the amount is transferred to indian Bank Account. It will be taxed as short term capital gains
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