New Income-tax Act 2025: what changes for Indians with US RSUs

India's Income-tax Act, 1961 was replaced by the Income-tax Act, 2025, effective from April 1, 2026 (FY 2026-27). For most salaried taxpayers, the practical impact is minimal — the same income, the same rates, the same forms. But for Indian residents with US RSUs, there are specific section references that changed, and the transition matters when you're reconciling Form 16, ITR-2, and equity plan documents.

This guide covers exactly what changed, what stayed the same, and what to check before you file for AY 2027-28.

What the Income-tax Act 2025 is

The Income-tax Act 2025 is a consolidation and recodification of the 1961 Act — not a new tax regime. The government's stated goal was to simplify the language, remove redundant provisions, and make the law more readable.

Tax rates, slabs, exemptions, and most deductions are carried forward. What changed is the structure: sections have been renumbered, some provisions merged, and the language updated from dense 1960s drafting to clearer modern prose.

For the ITR filing for AY 2026-27 (FY 2025-26), the old Act applied. From AY 2027-28 (FY 2026-27) onward, the new Act applies.

The RSU-specific change: section renumbering

Under the old Act, RSU perquisites were taxed under Section 17(2)(vi) — the definition of "perquisite" that included the value of specified securities allotted or transferred to an employee.

Under the Income-tax Act 2025, the equivalent provision is Section 17(1)(d).

The taxable event, the calculation method, and the tax treatment are identical. What changed is only the section number.

Why this matters in practice

• Form 16: your employer's payroll software may cite the new section reference for FY 2026-27 vests. If you see "Section 17(1)(d)" on your Form 16 instead of "Section 17(2)(vi)", this is correct — not an error.
• ITR-2: the income tax portal will update the schedule to reflect the new section. The perquisite amount goes in the same place; the label may reference the new section.
• Equity plan documents: your company's RSU plan document (typically a US document) still references US law. The Indian tax section reference is irrelevant to the plan document. Don't conflate them.
• CA/tax filer: if your CA is filing your ITR, confirm they're working from the new Act provisions for FY 2026-27 returns. A CA using old section references in computations isn't filing incorrectly (the math is the same), but it's worth a quick check.

What did not change

The following are unchanged under the Income-tax Act 2025:

Perquisite calculation: FMV on vest date (USD) × SBI TTBR rate on vest date × shares vested = perquisite value in INR. Taxed as salary in the year of vest.

Capital gains holding period: 24 months from vest date for LTCG treatment on foreign unlisted shares. US-listed shares (NYSE/NASDAQ) are treated as unlisted for Indian capital gains purposes — the 12-month threshold for listed securities does not apply.

LTCG rate: 12.5% without indexation for shares held >24 months.

STCG rate: your income tax slab rate (up to 30% plus surcharge and cess) for shares held ≤24 months.

Schedule FA: mandatory disclosure of all foreign assets held at any point during the calendar year. This obligation is unchanged.

SBI TTBR rate: still the prescribed conversion rate for perquisite calculation.

Form 67: still required to claim DTAA credit on US dividend withholding tax.

W-8BEN: still valid for 3 years; still needed to get the DTAA-reduced withholding rate on dividends.

One structural change worth knowing: the new Act's numbering logic

The 1961 Act had a chapter-and-section structure that grew organically over 60 years, with constant amendments leaving gaps and cross-references everywhere. The 2025 Act uses a cleaner hierarchy:

• Chapters → Parts → Sections → Sub-sections → Clauses

If you're looking up provisions yourself, the Income Tax Department has published a concordance table mapping old section numbers to new ones. For RSU-specific provisions:

The IT Department's e-filing portal will reflect new section references for FY 2026-27 returns when they open for filing in mid-2027.

What to do before filing AY 2027-28

1. Confirm Form 16 uses new section references for any RSU vests that happened after April 1, 2026. The perquisite amount should be the same regardless.

2. Reconcile the perquisite amount yourself — don't rely solely on Form 16. Calculate: FMV on vest date × SBI TTBR rate × share count. Cross-check against what your employer reported.

3. Check that your CA is up to date on the new Act. Most experienced RSU tax filers will be; it's worth confirming.

4. No action needed on the equity side — your RSU plan, brokerage account, W-8BEN, and DTAA treatment are unaffected by the Indian legislative change.

5. Schedule FA is still mandatory — the new Act preserves all foreign asset disclosure obligations under the Black Money Act (which is a separate statute from the income tax act anyway).

The bottom line

The Income-tax Act 2025 is a recodification, not a reform. For Indian RSU holders, the practical impact is:

• Section 17(2)(vi) becomes Section 17(1)(d) on Form 16
• The tax calculation, rates, and filing obligations are identical
• The first ITR affected is AY 2027-28 (for FY 2026-27 income)

If you're filing for AY 2026-27 right now, the old Act still applies. Nothing changes in your current return.