Google RSU Tax Harvesting: When STCG = 0 Beats Waiting for LTCG — A Counterintuitive Case Study

Most content on RSU tax planning in India focuses on losses — and for good reason, given how many tech stocks have declined from their 2021 peaks. But Alphabet (Google) is one of the few large-cap technology companies where long-term employees are sitting on significant gains, not losses. GOOGL has compounded from around $90 (split-adjusted) in early 2020 to approximately $320 today, with a temporary peak near $400 in late 2021.

This creates a different kind of planning problem: when to sell, and what tax rate applies. The conventional wisdom is "wait for LTCG" — hold the 24-month threshold and pay 12.5% instead of slab rates on STCG. But that conventional wisdom has an exception: when you have STCL from other positions that can be set off, STCG can be made zero. And zero beats any positive rate, including 12.5%.

This case study follows Rahul, a Staff Software Engineer at Google Hyderabad, through the exact scenario where STCG = 0 is mathematically superior to waiting for LTCG.

---

Rahul's Profile

• Role: Staff Software Engineer, Google India, Hyderabad
• Joined Google: June 2018
• Current GOOGL price: $320 (split-adjusted, 20:1 split in July 2022)
• INR/USD rate: Rs 84
• Current platform: Schwab Equity Awards (Google's equity platform post-2022)

---

The Specific RSU Lot in Question

Rahul received a refresher RSU grant in 2023 and 2024. The lot relevant to this decision:

Lot L-R1:

• Grant: April 2023 refresher grant
• Vest date: October 2024 (one-year cliff, then quarterly)
• Vest FMV: $168/share (GOOGL in October 2024)
• Net shares after TDS: 28 shares
• Cost basis (INR): Rs 168 × Rs 84 = Rs 14,112/share

As of August 2026 (22 months from vest):

• Current price: $320 = Rs 26,880/share
• Gain per share: Rs 26,880 − Rs 14,112 = Rs 12,768/share
• Total gain on 28 shares: Rs 3,57,504
• Holding period: 22 months — short-term under Indian law (needs 24 months for LTCG)

The decision point: In 2 months (October 2026), this lot crosses the 24-month threshold and becomes LTCG. Should Rahul wait?

---

The Conventional Calculation: Why "Wait for LTCG" Seems Right

If Rahul waits until October 2026 (24 months from vest):

• Assumes GOOGL stays at $320 (Rs 26,880)
• Gain: Rs 3,57,504 (same)
• Tax rate: 12.5% LTCG (Section 112, no exemption for foreign equity)
• Tax payable: Rs 3,57,504 × 12.5% = Rs 44,688

If Rahul sells now (August 2026, 22 months):

• Gain: Rs 3,57,504 (same)
• Tax rate: 20% STCG (Section 111A for listed equity, or slab rate — depends)
• Actually for foreign listed equity (GOOGL), STCG is taxed at slab rate, not 20% flat. At 30% slab: Rs 1,07,251 tax

On face value: wait for LTCG → Rs 44,688 vs sell now → Rs 1,07,251. Wait wins by Rs 62,563.

This is the conclusion almost everyone reaches — and for most situations, it is correct.

---

The STCL Set-Off: Why Rahul's Situation Is Different

Rahul has another position. In January 2026, he sold units of an Indian equity mutual fund after holding for 14 months. He booked a STCL of Rs 3,80,000 (the fund declined, and he sold to exit before further losses).

Under Indian Section 70/71:

• STCL can be set off against STCG in the same assessment year
• STCL can also be set off against LTCG
• STCL cannot be set off against income under any other head

Rahul's STCL of Rs 3,80,000 is sitting unused. It will be carried forward to FY 2026-27 and can be offset there against future STCG or LTCG — but only for 8 years.

What if Rahul uses it now against his Google STCG?

---

The STCG = 0 Calculation

Rahul sells L-R1 now (August 2026, 22 months, STCG):

• STCG: Rs 3,57,504
• Available STCL: Rs 3,80,000
• Set-off: Rs 3,57,504 STCG against Rs 3,57,504 of the STCL
• Net STCG: Rs 0
• Tax payable: Rs 0
• Remaining STCL: Rs 22,496 carried forward

Comparison:

Scenario	Tax payable	Carry-forward STCL	Notes
Wait for LTCG (Oct 2026)	Rs 44,688	Rs 3,80,000 remains unused	STCL cannot offset LTCG at same rate efficiency
Harvest STCG now	Rs 0	Rs 22,496 STCL	STCL fully deployed

Selling now saves Rs 44,688 compared to waiting for LTCG.

---

The Hidden Cost of Waiting: STCL Carry-Forward Is Not Free

The "wait for LTCG" scenario does not make Rahul's STCL disappear — it carries forward. But here is what carry-forward means in practice:

1. STCL can offset future STCG or LTCG, but at lower efficiency against LTCG: Rs 3,80,000 STCL against LTCG saves Rs 3,80,000 × 12.5% = Rs 47,500 — roughly the same as the Rs 44,688 LTCG tax saved by waiting.

2. However: The STCL must be used within 8 years of the year it was generated. If Rahul does not have significant gains in future years, the carry-forward erodes in value — unused portions of STCL that expire are worth zero.

3. The opportunity cost: STCL is most valuable when deployed against STCG (saving 20-30% slab tax) rather than LTCG (saving 12.5%). Using the Rs 3,80,000 STCL against Rahul's STCG (30% slab equivalent) saves Rs 1,07,251 in tax — far more than the Rs 47,500 it saves against LTCG later.

The correct framing: Rahul is not choosing between STCG and LTCG on the same gain. He is choosing whether to deploy Rs 3,80,000 of STCL now (at 30% efficiency → Rs 1,07,251 saved) or later against LTCG (at 12.5% efficiency → Rs 47,500 saved). Deploying now and paying Rs 0 on the Google gain is definitively superior.

---

When STCG = 0 Does NOT Beat Waiting for LTCG

This analysis has conditions. The strategy fails if:

1. Rahul has no STCL: Without the offset, STCG at slab (30%) = Rs 1,07,251 vs LTCG at 12.5% = Rs 44,688. Wait for LTCG wins clearly.

2. Rahul's STCL will be fully used anyway: If Rahul has other STCG sources (another job's ESOP gain, Indian equity gains) that will absorb the Rs 3,80,000 STCL regardless, deploying it on Google gains provides no additional benefit — waiting for LTCG is better.

3. GOOGL price increases significantly before the 24-month mark: If GOOGL rises to $380 before October 2026, the gain on the lot increases. The LTCG tax on Rs 4,68,720 (gain at $380) = Rs 58,590 — still less than the Rs 1,07,251 STCG if STCL is unavailable. But if STCL remains available and the gain grows, selling now locks in a lower gain amount than waiting.

4. The lot is less than 12 months old: STCG on foreign equity at slab rates applies from 0-24 months. There is no acceleration advantage from selling at 1 month vs 22 months — the tax rate is the same. The STCG=0 strategy works best when the lot is 18-23 months old (near the LTCG threshold) so the waiting period saved is short.

---

Rahul's Complete FY 2025-26 Tax Picture

Rahul's other capital activity:

• LTCG from older GOOGL lots (vest 2020-2022, held 4+ years): Rs 5,80,000 (from selling L-G1 through L-G4 to diversify into UCITS ETFs)
• STCL from Indian equity MF (already mentioned): Rs 3,80,000

Without the L-R1 sale:

• LTCG Rs 5,80,000 at 12.5%: Rs 72,500
• STCL Rs 3,80,000 set off against LTCG: saves Rs 3,80,000 × 12.5% = Rs 47,500
• Net tax: Rs 72,500 − Rs 47,500 = Rs 25,000
• STCL not used (LTCG fully absorbed): None remaining

Wait — this recasts the problem. If Rahul is already using the STCL to offset his LTCG from older lots (L-G1 through L-G4), the STCL is already committed to LTCG offset. Adding L-R1 STCG to the picture:

With L-R1 sale (STCG Rs 3,57,504):

• LTCG Rs 5,80,000 at 12.5%: Rs 72,500
• STCL Rs 3,80,000: can now offset both LTCG and STCG
• First offset STCG Rs 3,57,504 (saves Rs 1,07,251 at 30% slab vs Rs 44,688 at 12.5% LTCG)
• Remaining STCL Rs 22,496 offsets LTCG: saves Rs 2,812
• Tax on remaining LTCG Rs 5,57,504: Rs 69,688
• Total tax: Rs 69,688

Without L-R1 sale:

• LTCG Rs 5,80,000; STCL Rs 3,80,000 fully absorbed against LTCG → saves Rs 47,500
• Total tax: Rs 72,500 − Rs 47,500 = Rs 25,000

In this scenario, selling L-R1 early increases overall tax (Rs 69,688 vs Rs 25,000) because the STCL is already efficiently deployed against the larger LTCG pool.

The lesson: STCG = 0 beats waiting for LTCG only when the STCL has no better use. The analysis requires your complete capital gains picture — not just the RSU lot in isolation.

---

The General Rule: When STCG = 0 Beats LTCG

STCG = 0 (through STCL set-off) beats waiting for LTCG when:

1. You have unused STCL that cannot be efficiently deployed against anything else this year
2. The alternative use of the STCL (against future LTCG) saves less tax than deploying it against current STCG (because STCG slab rate > LTCG 12.5% rate)
3. The STCL carry-forward is at risk — either you won't have sufficient gains in future years, or the 8-year window is narrowing

The set-off efficiency comparison:

• STCL vs STCG: saves up to 30% (slab rate) per rupee of STCL
• STCL vs LTCG: saves only 12.5% per rupee of STCL
• If your only future use is vs LTCG: you save 2.4× more by deploying STCL against current STCG

---

How Rovia Enables This Analysis for Google Employees

Rahul's Google shares sit in Schwab Equity Awards. The platform shows him USD gains/losses and US tax classification. It does not:

• Calculate INR gain per lot using vest-date RBI rates
• Identify which lots are within the 22-23 month STCG window (where the LTCG threshold is near)
• Compare STCL deployment efficiency across current STCG vs future LTCG
• Generate the Schedule CG documentation for the set-off

After transferring to Rovia:

• All lots displayed with INR gain/loss, months held, STCG/LTCG classification under Indian 24-month rule
• Rovia's "tax strategy" mode allows Rahul to input his STCL carry-forward (Rs 3,80,000) and his expected other gains (LTCG from older lots)
• Rovia models both scenarios: harvest L-R1 now (STCG = 0) vs wait for October 2026 (LTCG at 12.5%)
• Rovia shows the tax differential — in Rahul's complete picture, waiting wins; in a scenario where STCL had no other use, harvesting now would win
• The analysis is personalised to Rahul's full capital gains picture, not the lot in isolation

This is the value of lot-level Indian tax analysis. The decision depends on the complete picture. Rovia provides the complete picture.

---

Summary: The STCG = 0 Strategy for Google India Employees

Scenario	STCL available	STCL best use	Decision
STCL exists, no other STCG/LTCG to offset	Yes	Current Google STCG	Sell now: STCG = 0
STCL exists, large LTCG from other sources	Yes	Offset LTCG (12.5% efficiency)	Wait for LTCG on Google lot
No STCL	No	N/A	Wait for LTCG
STCL carry-forward expiring	Yes, limited time	Current Google STCG	Sell now before STCL expires

For Google India employees: the decision is never just "STCG rate vs LTCG rate." It is "what is the best deployment of all available loss carry-forwards across all current-year gains?" That calculation requires your complete tax picture — and it changes every year as your gains and carry-forwards shift.

Rovia's lot-level analysis and multi-source gain integration makes this calculation tractable. For the first time, a Google India employee can see not just their lot's INR gain, but how that gain interacts with every other element of their Indian tax picture — and what the optimal execution strategy is.