Tax filing season July 2026: the complete roadmap for Indian residents with US stocks, RSUs, and ESPP

The ITR deadline for AY 2026-27 is July 31, 2026 — roughly 100 days from when this article publishes. The ITR utility for AY 2026-27 just opened, and if you're an Indian resident who held US stocks, ESPP, or RSUs at any point during FY 2025-26 (April 1, 2025 to March 31, 2026), this is the year your tax filing got materially more complex. Starting now gives you the runway to do it right rather than rushing in late July.

The 30-second answer: The ITR-2 deadline for Indian residents with US stocks, RSUs, or ESPP is July 31, 2026 (AY 2026-27). Three changes this year: (1) Form 67 must now be filed BEFORE ITR-2, not after — this is the biggest procedural trap; (2) Schedule FA enforcement via AEOI/CRS data has tightened; (3) Section 112 LTCG is 12.5% without indexation. The 8-step workflow: gather data → determine residency → build transaction log → classify by section → convert at SBI TTBR → file Form 67 → file ITR-2 with Schedule FA + CG + OS → verify acknowledgment. (Form 44 under the Income-tax Act 2025 takes over from AY 2027-28 — not this year.)

Three things changed for AY 2026-27 that nobody is talking about clearly:

1. Form 67 must now be filed BEFORE the ITR-2 itself, not after. This is the key procedural change for AY 2026-27. (Form 44 under the Income-tax Act 2025 replaces Form 67 from AY 2027-28 onwards — it does not apply to this year's filing.)
2. Schedule FA enforcement has tightened. The Income Tax Department now has substantially more AEOI/CRS data from US brokers. Mismatches between your filing and IRS-reported balances will trigger scrutiny.
3. Section 112 long-term capital gains taxation was reduced to 12.5% (from 20% with indexation) per Budget 2024, but only without indexation. The holding period for foreign equity remains 24 months for long-term classification.

This master article is the orchestrator for the full tax filing season. It walks through what every Indian resident with US equity exposure needs to do, the sequence, and links to the deep guides for each step.

The honest framing at the top: filing season 2026 is harder than 2025 because of (1) the Form 67 timing change that confuses everyone (it must now be filed BEFORE ITR-2, not after), (2) tightened enforcement, and (3) the LTCG rate change creating Section 112 vs Section 111A confusion. This roadmap exists so you can do it correctly in a single weekend rather than scrambling on July 28.

The 30-second roadmap

Before the deep dive, the entire sequence in one table:

Step	What you do	When	Deep guide
1	Gather your full FY 25-26 paper trail	Now (April-May)	Cost basis tracking + broker statement reading
2	Identify your residency status (Resident / RNOR / NR)	Now	Section 6 residency rules
3	Build your transaction log: vests, sells, dividends	May-June	RSU attribution + cost basis tracking
4	Categorize each transaction by tax treatment	June-July	RSU double-taxation explained
5	Compute SBI TTBR for every taxable event	June-July	Currency + worked examples
6	File Form 67 for foreign tax credit	Before ITR-2	Form 67 transition guide
7	File ITR-2 with Schedule FA, Schedule CG, Schedule OS	By July 31	ITR-2 walkthrough
8	Verify e-filing receipt + Schedule FA acknowledgment	Same day as filing	This article

That's the entire roadmap. Sections below walk through each step.

Step 1 — Gather your full FY 2025-26 paper trail

The single biggest failure mode in tax filing is incomplete data. You will need:

From your US broker (Morgan Stanley StockPlan Connect, Charles Schwab Equity Awards, E*Trade Stock Plans, Fidelity NetBenefits, Interactive Brokers, others):

• Full year statement covering January 1, 2025 to December 31, 2025 (calendar year — needed for Schedule FA)
• Plus separate report covering April 1, 2025 to March 31, 2026 (Indian financial year — needed for ITR-2 income computation)
• Yes, these overlap. Yes, you need both.
• Cost basis report for every lot you sold
• Dividend report with US withholding tax detail (Form 1042-S equivalent if available)
• Year-end portfolio statement showing all holdings on December 31, 2025

From your employer (if you have US RSUs/ESPP):

• Form 16 from your Indian employer
• Equity compensation supplementary statement (if your Indian employer is the Indian arm of a US multinational)
• US W-2 if you have any US-source income (rare but happens for some employees who worked partial US tenure)

From the Income Tax Department:

• Form 26AS (Annual Information Statement)
• AIS (Annual Information Statement)
• TIS (Taxpayer Information Summary)
• Cross-reference: do these include your foreign asset disclosure data?

From your bank (LRS records):

• LRS remittance certificates for every USD purchase
• 26AS for TCS deducted on remittances over Rs 10 lakh

→ Deep guide: How to read your Morgan Stanley StockPlan Connect statement (the methodology applies to other brokers too)

→ Deep guide: Cost basis tracking spreadsheet for RSUs

Step 2 — Identify your residency status

This determines whether you file ITR-2 (resident) or potentially ITR-3 (RNOR with business income) and what gets disclosed.

Resident and Ordinarily Resident (ROR):

• Full worldwide income taxable in India
• Full Schedule FA disclosure of foreign assets
• Form 67 for foreign tax credit
• This is the most common case for FY 2025-26

Resident but Not Ordinarily Resident (RNOR):

• US income that did not accrue or arise in India and is not received in India is NOT taxable
• Limited Schedule FA disclosure (some judicial interpretation here)
• This is the magical 3-year window for returning NRIs

Non-Resident (NR):

• Only Indian-source income taxable
• US stocks held outside India typically excluded from Indian taxation
• File ITR-2 if any Indian income; otherwise no India filing required

→ Deep guide: Becoming RNOR — residency rules for returning Indians

Step 3 — Build your transaction log

For each taxable event during FY 2025-26, log:

Field	What to capture
Date	Calendar date (DD-MM-YYYY)
Event type	RSU vest / ESPP purchase / Stock sale / Dividend / Stock split
Stock symbol	TICKER
Quantity	Number of shares
US$ price	Per-share US$ at event date
US$ total	Quantity × price
SBI TTBR	INR per US$ at event date (from SBI reference rate published page)
INR total	US$ total × SBI TTBR
Tax category	Salary (vest) / Capital Gain ST / Capital Gain LT / Other Sources (dividend)
Section	Section 17 / 111A / 112 / 56 etc

For RSU vesting specifically, the "income" is the FMV at vest × SBI TTBR. This becomes Section 17(2) perquisite added to your salary income.

For stock sales, the "income" is (Sale value INR - Cost basis INR). Capital gains classification depends on holding period.

For dividends, the "income" is the gross dividend × SBI TTBR. Net of US 25% withholding (assuming W-8BEN filed).

→ Deep guide: How RSU double-taxation actually works

→ Deep guide: W-8BEN form for India residents

Step 4 — Categorize each transaction correctly

This is where most filings go wrong. The categorization rules:

RSU vest

• Section: 17(2) — perquisite, part of salary income
• Computation: FMV × shares × SBI TTBR on vesting date
• Less: Tax already withheld in US (sell-to-cover or hold)
• Schedule: Salaries schedule of ITR-2

Stock sale — held ≤24 months from acquisition

• Section: 111A (short-term capital gains for listed equity, but US stocks aren't STT-paid Indian equity, so technically these are short-term gains under Section 112A is NOT applicable)
• Actually: US stocks held ≤24 months → Short-term capital gains under Section 112(1)(a)(ii), taxed at slab rate (not 15% — that's only for STT-paid Indian equity)
• Schedule: Schedule CG of ITR-2

Stock sale — held >24 months from acquisition

• Section: Section 112(1)(c) — long-term capital gains for unlisted/foreign securities
• Tax rate: 12.5% without indexation (Budget 2024 change effective July 23, 2024)
• Schedule: Schedule CG of ITR-2

Dividend received

• Section: 56 — Income from other sources
• Tax rate: Slab rate
• US WHT: 25% (if W-8BEN filed; 30% if not)
• DTAA relief: Form 67 credit for US WHT paid

ESPP purchase (US-based plan)

• At purchase: Discount (FMV - employee price) × shares is Section 17(2) perquisite
• At sale: Capital gain on (Sale price - FMV at purchase) — qualifying vs disqualifying lookback nuance

→ Deep guide: How US stocks are taxed in India

→ Deep guide: Stock options (ISO/NSO) and India tax

Step 5 — Compute SBI TTBR for every taxable event

The Income Tax Department prescribes that all foreign-currency transactions be converted to INR using SBI Reference Rate (TT Buying) on the date of the transaction.

Where to find: SBI publishes daily Reference Rates. Historical rates are available on the SBI website and several aggregators.

Common errors:

• Using closing rate instead of TT Buying rate (slightly different)
• Using RBI reference rate instead of SBI (RBI rate is for different purpose)
• Using the rate from the date of credit to your bank account rather than the date of the transaction
• Using the rate at year-end for all transactions (only valid for Schedule FA balance disclosure)

Practical tip: For taxable events (RSU vest, sale, dividend), use the SBI TTBR on the exact transaction date. For Schedule FA year-end balance disclosure, use the SBI TTBR on the last business day of the calendar year (December 31, 2025).

Step 6 — File Form 67 for foreign tax credit BEFORE filing ITR-2

This is the procedural change that will catch most people in AY 2026-27.

Until AY 2025-26: Form 67 could be filed at any time before assessment, often after filing the ITR.

AY 2026-27 onwards: Form 67 must be filed BEFORE the ITR. If you file ITR-2 first, you cannot retrospectively add the foreign tax credit claim. The form and the mechanics are the same — only the sequencing has changed.

Note on Form 44: The Income-tax Act 2025 introduces Form 44 as a replacement for Form 67, but this takes effect from AY 2027-28 (Tax Year 2026-27). For the ITR you are filing now (AY 2026-27, income earned FY 2025-26), Form 67 is the correct form.

Form 67 requires:

• Country of source (US)
• Nature of income (Salary / Capital Gain / Dividend)
• Foreign income amount
• Foreign tax paid
• Computation of tax payable on this income in India
• Final FTC eligible

The amount on Form 67 must match what you'll claim in ITR-2 Schedule FSI (Foreign Source Income).

→ Deep guide: Form 67 → Form 44 transition guide for AY 2026-27

→ Deep guide: Form 67 deadline tracker

Step 7 — File ITR-2 with all schedules

The actual ITR-2 filing involves multiple schedules:

Schedule	What it captures
Salaries	RSU vest income (Section 17(2) perquisite)
Schedule CG	All capital gains — ST under 112(1)(a)(ii), LT under 112(1)(c)
Schedule OS	Dividend income (Section 56)
Schedule FSI	Foreign source income with country and DTAA article
Schedule TR	Tax relief under DTAA
Schedule FA	Foreign assets held during calendar year 2025 (overlapping window)
Schedule FA Part B	Foreign income from these assets

The most consequential schedule for AY 2026-27 is Schedule FA. This is where the AEOI/CRS data the IT Department has from US brokers gets compared to what you disclosed. Mismatches trigger scrutiny.

→ Deep guide: Schedule FA step-by-step for AY 2026-27

→ Deep guide: ITR-2 complete walkthrough for RSU holders 2026

→ Deep guide: RSU to ITR-2 complete workflow

Step 8 — Verify and acknowledge

After filing:

• Download ITR-V acknowledgment
• Verify e-filing via Aadhaar OTP / Net banking
• Save Schedule FA acknowledgment screenshot
• Keep ALL supporting documents (broker statements, SBI TTBR records, Form 67 receipt) for at least 8 years (Black Money Act prosecution window)

The scenarios — which deep guides apply to you

Different reader profiles need different deep guides. The decision tree:

"I work at a US multinational's Indian arm and have RSUs that vest periodically"

Primary guides for you:

• How RSU double-taxation actually works
• RSU to ITR-2 complete workflow
• Your specific employer guide: Google, Microsoft, Meta, Amazon, Apple, NVIDIA
• Reading your Morgan Stanley StockPlan Connect statement
• Form 67 → Form 44 transition
• Schedule FA step-by-step

"I bought US stocks through LRS via Vested / IndMoney / similar"

Primary guides for you:

• How US stocks are taxed in India
• LRS, TCS, Schedule FA — the compliance trifecta
• Schedule FA step-by-step
• W-8BEN form for India residents
• Holding period rules across asset classes

"I returned to India during FY 2025-26 and held US RSUs/stocks before returning"

Primary guides for you:

• Becoming RNOR — Section 6 residency rules
• Returning India: US RSU playbook
• RSU vesting in year of return — DTAA attribution
• US vs India RSU vesting framework
• Employer transfer: US-India relocation tax reset

"I had a major life event during FY 2025-26"

Specific life-event guides:

• Getting married with US RSUs
• Death of a US RSU holder
• Divorce with US RSUs
• Sending kids to US college via LRS
• Buying a flat in India with RSU proceeds — Section 54F

"I never filed Schedule FA in prior years and I'm worried"

Primary guides for you:

• What is Schedule FA — foreign asset disclosure
• What is the Black Money Act
• Missed Schedule FA in prior years — what to do now (coming this week)

The five mistakes that will cost you this year

The patterns we've seen in client filings AY 2024-25 and AY 2025-26 indicating where AY 2026-27 will go wrong:

Mistake 1 — Wrong SBI TTBR date. Using the rate when the cash hit your bank rather than the transaction date. This sounds minor but compounds across many transactions.

Mistake 2 — Treating RSU sales as Section 111A. US stocks sold are NOT under Section 111A (which is for STT-paid Indian listed equity). Short-term gains on US stocks are at slab rate; long-term at 12.5% without indexation under Section 112(1)(c).

Mistake 3 — Missed Schedule FA disclosure. Either forgetting it exists or thinking "I sold everything mid-year so I don't need to disclose." Wrong. If you held the asset at ANY point during calendar year 2025, it must be disclosed.

Mistake 4 — Form 67 timing confusion. Filing Form 67 AFTER ITR-2. The critical change for AY 2026-27 is that Form 67 must be filed BEFORE you submit ITR-2 — not after. Filing ITR-2 first means you cannot add the foreign tax credit claim to that return. (Form 44 under the Income-tax Act 2025 does not apply until AY 2027-28.)

Mistake 5 — Form 16 attribution mismatch. Indian employers report RSU vest income on Form 16 differently than what your US broker shows. Need to reconcile both, not just rely on Form 16.

→ Deep guide: 5 most common ITR-2 mistakes for US RSU holders (coming this week)

The case for getting help

Filing season 2026 has too many moving parts for the average resident to navigate solo in a single weekend. Specifically:

• If you have RSUs from a US employer: the Form 16 vs broker statement attribution problem is real. Get help from an equity-comp specialist.
• If you returned to India during the year: the residency status determination and RSU attribution requires bilateral DTAA analysis. Get help.
• If you sold US stocks during the year and Form 67 is required: the deadline coordination between Form 67 and ITR-2 needs careful sequencing. Get help.

For most other cases (just buying US ETFs through LRS, holding without sale, single broker, simple residency status), this is manageable solo with the deep guides linked above.

A note on Rovia for next year

If you're reading this in panic mode for AY 2026-27 because tracking all this for FY 25-26 was a nightmare, the structural fix for next year is: consolidate your RSU holdings on a single platform that natively understands the India compliance burden.

Most US brokers (Morgan Stanley, Schwab, E*Trade, Fidelity) are built for US tax workflows. They don't natively output SBI TTBR-denominated cost basis. They don't natively help with Schedule FA. They don't natively support Form 67 attribution.

Rovia is built differently. Transfer your RSUs from your traditional US broker to Rovia, and the cost basis tracking, SBI TTBR conversion, Schedule FA-ready statement, and diversification recommendations all happen in one place. Traditional brokers don't help with India-specific tax workflow — Rovia does. For FY 2026-27 onwards, the filing season can be substantially easier if your data lives on the right platform.

The closing read

Tax filing season 2026 for Indian residents with US equity is harder than 2025 because of three structural changes: Form 67 now must be filed BEFORE ITR-2 (not after, as was common practice), tightened AEOI/CRS enforcement on Schedule FA, and LTCG rate changes creating Section 112 vs 111A confusion. The deadline is July 31, 2026 — 39 days from now.

The roadmap is achievable: 8 steps, sequenced correctly, with deep guides for each. Most readers can complete this in a focused weekend if data is gathered upfront. Edge cases (returning NRI, life events, missed Schedule FA in prior years) need professional support.

Start with Step 1 today. Gathering data is the slowest, most context-switching-heavy part. Once data is complete, computation and filing happen in a single sitting.

Cross-references — the complete tax content hub

Foundational understanding:

• How US stocks are taxed in India
• How RSU double-taxation actually works
• Holding period rules across asset classes
• Currency risk and rupee-dollar US returns

Forms and compliance:

• What is Schedule FA — foreign asset disclosure
• Schedule FA step-by-step for AY 2026-27
• What is Form 67 — foreign tax credit
• Form 67 → Form 44 transition for AY 2026-27
• Form 67 deadline tracker AY 2026-27
• What is the Black Money Act
• What is the W-8BEN form
• LRS, TCS, Schedule FA compliance trifecta

RSU-specific:

• Complete RSU guide for Indians at US multinationals
• What is an RSU
• RSU vesting — the real tax math
• Should you sell RSUs at vest or hold
• Sell-to-cover / sell-all / hold decisions
• RSU lot selection and tax-loss harvesting
• RSUs when changing jobs or laid off
• Pre-IPO RSUs — the tax liquidity problem
• ESPP vs RSU total comp thinking

Filing walkthroughs:

• ITR-2 walkthrough for RSU holders 2026
• RSU to ITR-2 complete workflow
• Reading your Morgan Stanley StockPlan Connect statement
• Cost basis tracking spreadsheet for RSUs

Employer-specific guides:

• Google RSU India guide
• Microsoft RSU India guide
• Meta RSU India guide
• Amazon RSU India guide
• Apple RSU India guide
• NVIDIA RSU India guide

Returning NRI (RNOR) playbook:

• Returning India US RSU playbook
• Becoming RNOR — residency rules
• RSU vesting in year of return
• US vs India RSU vesting
• Employer transfer relocation tax reset
• 401k and IRA for returning NRIs
• Selling US property as returning NRI

Life events:

• Marriage with US RSUs
• Death of US RSU holder
• Divorce with US RSUs
• Sending kids to US college via LRS
• Buying flat in India — Section 54F

Critical disclaimer: this article reflects tax law and procedural guidance as of June 2026. Tax laws and forms change. Specific facts of your situation determine actual treatment. This article does not substitute for personalized advice from a Chartered Accountant or tax professional licensed in India.