RSU take-home after Indian perquisite tax: the exact calculation

RSU vesting shows up on paper as, say, a ₹20 lakh event. The number on your offer letter, the number your equity management platform displays, the number your manager references in your review. The number you actually take home is meaningfully smaller. This guide shows you exactly why, and how to compute it.

Use the RSU take-home calculator to compute your exact take-home for any vest.

---

What happens at vesting

When your RSUs vest:

1. The shares transfer to your US brokerage account (or employer's equity platform)
2. The FMV on that date × number of shares = perquisite value
3. This perquisite is treated as salary income in the month of vesting
4. Your employer deducts TDS (usually via sell-to-cover — selling some shares to fund the tax)
5. The remaining shares arrive in your account

Acquisition cost = zero for standard RSU grants (you paid nothing for the grant). So the entire FMV is taxable.

---

The tax computation

Example: 200 RSUs vest when stock is $120, USD/INR = 92

Perquisite value: 200 × $120 × 92 = ₹22,08,000

Tax at different income levels (new regime, FY 2026-27):

Total income (salary + perquisite)	Effective rate	Tax on perquisite	Shares sold (sell-to-cover)	Shares kept
₹15 lakh (below ₹50L)	31.2%	₹6,88,896	≈62 shares	138 shares
₹60 lakh (₹50L–₹1Cr)	34.32%	₹7,57,866	≈69 shares	131 shares
₹1.2 crore (₹1–2Cr)	35.88%	₹7,92,230	≈71 shares	129 shares
₹2.5 crore (>₹2Cr, new regime)	39%	₹8,61,120	≈78 shares	122 shares

The difference between no surcharge (138 shares) and top surcharge (122 shares) is 16 shares — worth $1,920 or ≈₹1,76,640 at these prices. Surcharge planning matters.

---

Surcharge: the hidden RSU cost

Many RSU recipients in ₹50–80 lakh total income range are surprised to learn their effective tax rate is 34.32%, not 31.2%. The 10% surcharge on the base tax (30% × 1.10 × 1.04 cess) is the culprit.

The marginal rate spike: A vest that pushes you from ₹49 lakh to ₹51 lakh total income means surcharge applies to the entire ₹51 lakh, not just the incremental ₹2 lakh. This cliff effect means large RSU vests in the ₹40–55 lakh income zone deserve careful timing consideration.

Can you defer vesting? Usually no — your employer sets the vest schedule. But if you have control over when you join or leave, understanding the income cliff helps.

---

The Form 16 check

After each vest, verify:

1. The perquisite value in your pay stub matches the calculation above
2. The TDS deducted covers your liability at your actual marginal rate
3. Form 16 Part B shows the perquisite under "Perquisites valued as per rules"

Many global payroll systems compute RSU perquisite at the employer's stock plan administrator's FMV, which may differ slightly from the actual market price at the moment of vest. Small discrepancies are common; large ones (>5%) should be queried with payroll.

---

What the retained shares are worth in various scenarios

Continuing the example (138 shares retained, acquired at ₹11,040/share = $120 × 92):

Stock in 12 months	USD/INR	Value (INR)	Gain per share	STCG tax (31.2%)
$120 (flat)	95	₹15,73,800	₹360/sh	₹15,408
$150 (+25%)	95	₹19,67,250	₹3,210/sh	₹1,37,348
$90 (−25%)	95	₹11,80,350	−₹3,690/sh	Loss — carry forward

After 24 months, any further gain switches to LTCG at 12.5% — cutting the tax bill by 60% vs STCG.

---

Common mistakes

1. Treating the ₹22 lakh vest as take-home At 34.32% effective rate, you keep ≈₹14.5 lakh equivalent (131 shares) — not ₹22 lakh.

2. Not tracking the vest-date FMV You need this for capital gains when you sell. Don't rely on memory or a later print-out — record the FMV and USD/INR rate on the actual vest date.

3. Assuming employer TDS is correct If your investment declaration was wrong, if a large unexpected vest happened, or if your employer uses the prior year's rate, TDS may be off. Check Form 26AS after each vest.

4. Forgetting Schedule FA Every year you hold RSU shares in a US brokerage, disclose them in Schedule FA. First year: initial value = vest-date FMV × shares. Use the Schedule FA helper.

---

The one-line version

A ₹20 lakh RSU vest becomes ≈₹13–14 lakh in actual shares after sell-to-cover at a 34% effective rate. Use the RSU take-home calculator to compute your exact number before each vest.