RSU cost basis for Indian tax: which number to use and where to find it

You sold some RSU shares in FY 2025-26. Your CA asked for "the cost basis." You opened your broker statement and saw four candidates:

• A column called "Cost Basis": $0.00
• A column called "Adjusted Cost Basis": $185.40 per share
• A number your employer's payroll team gave you as "vest-date FMV": ₹15,452 per share
• The "purchase price" in the grant agreement: $0 (RSUs are granted, not purchased)

Which one? The answer is specific and the stakes are real — using the wrong one either causes you to overpay tax (using zero cost basis) or underpay (using grant date or some other basis).

The answer first

For Indian RSU capital gains tax, the cost basis is:

The fair market value (FMV) of the shares on the vest date, converted to INR using SBI TTBR on the vest date.

This is the same value that was added to your salary as a perquisite (Section 17(2) of the Income Tax Act). The logic: you were already taxed on this amount as income when the shares vested. Using it as your cost basis prevents double taxation — you pay capital gains tax only on the appreciation after vest, not on the amount already taxed as salary.

Why this matters: the double-tax trap

Suppose 10 shares vest at $200/share. The perquisite is $2,000 (₹1,66,000 at ₹83.00 TTBR). You're taxed on ₹1,66,000 as salary.

Six months later you sell at $220/share. Sale proceeds: $2,200 (₹1,83,040 at ₹83.20 TTBR).

If cost basis = $0 (wrong): Capital gain = ₹1,83,040 − ₹0 = ₹1,83,040. You pay STCG tax on ₹1,83,040. But ₹1,66,000 of that was already taxed as salary. You're taxed twice on ₹1,66,000.

If cost basis = vest-date FMV in INR (correct): Capital gain = ₹1,83,040 − ₹1,66,000 = ₹17,040. You pay STCG only on the post-vest appreciation. No double taxation.

The difference in tax: at a 30% slab rate, ₹1,66,000 × 30% = ₹49,800 of excess tax if you use zero cost basis. For a large RSU grant, this error costs lakhs.

Where to find the correct cost basis in each broker

Morgan Stanley StockPlan Connect

Navigate to: Activity → filter by "Vest"

The correct field is the "Total Amount" on the Vest row — not the "Cost Basis" column (which may show $0 or an adjusted number depending on statement format).

For each lot:

• Vest Date: the "Activity Date" on the Vest row
• USD cost basis per share: Total Amount ÷ Quantity (= share price on vest date)
• INR cost basis per share: USD cost basis × SBI TTBR on the Activity Date

Cross-check: the "Cost Basis" column on a sale row should match this if the statement format shows adjusted basis (vest-date FMV). If it shows $0, ignore it and use the Vest row calculation.

Fidelity NetBenefits

Navigate to: Stock Plan → Activity History → filter by "Release"

The correct field is the "Total Market Value" on the Release row (= Quantity Released × Price per Share on Release Date).

Fidelity Positions tab may show an "Average Cost Basis" — this is useful as a sanity check but may average across lots with different vest-date FMVs. For accurate lot-by-lot capital gains, use the Release row's Total Market Value for each lot independently.

E*Trade Stock Plan (Morgan Stanley at Work)

Navigate to: Stock Plan → My Account → Transactions → filter by "RS Release"

The correct field is the "Gross Value" (or "Total Market Value") on the RS Release row.

The Positions tab may show "Cost Basis" per share — for RSUs, this is typically the vest-date FMV (the adjusted US cost basis). Cross-check it against the Gross Value ÷ Quantity from the RS Release row.

Charles Schwab Equity Awards

Navigate to: Equity Awards → Transaction History → Vest

Look for "Vest Value" or "Market Value at Vest" — this is the gross vest amount. For each lot, cost basis = Market Value at Vest ÷ Shares Vested = per-share USD cost basis.

Carta (common for startup RSUs)

Carta typically provides a Tax Lot Report (downloadable as CSV under Portfolio → Tax Lots). The "Cost per Share" column in the Tax Lot Report represents the vest-date FMV. Verify it matches the vest-date share price in the grant documentation.

Building the lot-by-lot cost basis table

If you've had multiple vest events (quarterly vesting is common), build this table before handing off to your CA:

Vest Date	Shares Vested	USD FMV/Share	SBI TTBR	INR/Share	Total INR Cost Basis
01-Mar-2025	25	$185.40	₹83.20	₹15,425	₹3,85,625
01-Jun-2025	25	$195.20	₹83.60	₹16,318	₹4,07,950
01-Sep-2025	25	$202.80	₹84.10	₹17,055	₹4,26,375
01-Dec-2025	25	$198.50	₹84.30	₹16,734	₹4,18,350

When you sell, match shares sold to specific lots. If your broker uses FIFO (First In, First Out) — the default — the shares sold come from the earliest vest first. Your CA applies the INR cost basis of the earliest lot against the INR sale proceeds to compute the gain.

The two conversion rates that confuse people

For RSU capital gains, two different SBI TTBR rates are used:

Conversion	Date for SBI TTBR
Cost basis → INR	Vest date (the date shares vested and perquisite was realised)
Sale proceeds → INR	Sale date (the date you or your broker executed the sale)

Using the sale-date TTBR for cost basis (or vice versa) produces the wrong capital gain. The rates differ because the rupee moves between vest and sale.

Example: shares vested on 01-Mar-2025 (TTBR ₹83.20), sold on 15-Jun-2026 (TTBR ₹84.50). The cost basis is at ₹83.20; the sale proceeds are at ₹84.50. The difference in rates itself produces a small exchange rate component in the gain, which is normal and correct.

What about shares sold via sell-to-cover?

The automatic sell-to-cover at vest (shares sold by the broker to cover US tax withholding) is not a capital gain event for Indian tax. Here's why:

• The sell-to-cover is executed on the same day as the vest, at the same price (or very close to it)
• The entire gross vest value was already taxed as perquisite income
• There is no holding period or appreciation — it's a same-day disposal at vest-date price

Some CAs include the sell-to-cover as a short-term capital gain of zero (sale price = cost basis). This is technically correct but adds complexity for no tax impact. The more defensible position is to exclude it entirely and document why: the sell-to-cover is part of the vest event, not a separate capital event.

Checklist before handing to your CA

• Vest-date FMV in USD for each lot (from broker's vest/release activity rows)
• SBI TTBR for each vest date (from SBI historical TTBR table)
• INR cost basis per lot = USD FMV × TTBR (compute this, not your CA)
• Sale date and sale proceeds in USD
• SBI TTBR for sale date
• INR sale proceeds = USD proceeds × TTBR
• Lot matching: which lots were sold (FIFO or specific identification)
• Holding period per lot: vest date to sale date (< 24 months = STCG at slab; ≥ 24 months = LTCG at 12.5%)