RSU tax filing in India: every schedule, every field explained

If you hold RSUs in a US-listed company and you are an Indian resident, your ITR-2 involves four moving parts that most people either skip or file in the wrong order: Schedule CG (capital gains on sale), Schedule FSI (foreign source income), Schedule FA (foreign assets disclosure), and Form 67 / Form 44 (foreign tax credit).

This article explains every field you will encounter in each of these — what it means, where the number comes from, and what happens if you get it wrong.

What you need before you open the portal

Gather these documents before you start. Every number in the schedules below comes from one of these:

Document	What it contains	Where to get it
Form 16 (Part A + B)	RSU vesting perquisite, TDS deducted, salary breakdown	Your employer's HR / payroll team
Broker release statement	Vest date, shares released, FMV on vest date (in USD)	Morgan Stanley, Fidelity, Schwab, or E*TRADE portal
Trade confirmation / 1099-B or equivalent	Sale date, sale price, shares sold, US tax withheld	Broker portal → Tax Documents
1042-S	US-source income paid to you, US withholding tax on dividends	Broker portal → Tax Documents (issued by April 30)
Form 26AS	TDS reflected by employer, advance tax, TCS	IT portal → AIS / Form 26AS
RBI reference rates	USD/INR conversion on key dates (vest, sale, dividend pay dates)	RBI website → Reference Rate Archive

One conversion rule used throughout: Use the RBI Reference Rate on the transaction date (or the last available rate if the transaction falls on a non-business day). Do not use bank rates, TT rates, or broker FX rates for the ITR.

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Part 1 — Schedule S: RSU vesting income (your employer handles most of this)

Before you touch the capital-gains schedules, confirm that your vesting income is correctly captured in Schedule S. This is not something you usually fill manually — it flows from Form 16. But you need to verify it is right.

What RSU vesting looks like in Schedule S:

When RSUs vest, the income is treated as a perquisite under Section 17(2)(vi). The taxable perquisite value is:

FMV on vest date × number of shares vested (converted to INR at RBI rate on vest date) minus any amount you paid for the shares (usually zero for RSUs).

Your employer grosses this up in your salary, deducts TDS, and reports it in Form 16 under "Perquisites as per Section 17(2)." Check that the rupee value in Form 16 matches what you compute from your broker's release statement.

Cost basis for future capital gains starts here:

The FMV on the vest date (in INR) becomes your cost of acquisition for Schedule CG when you eventually sell. Note this down: you will need it in Part 2.

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Part 2 — Schedule CG: Capital gains when you sell RSU shares

This is where you report the gain or loss from selling the vested shares. On the IT portal, go to:

ITR-2 → Schedules → Schedule CG (Capital Gains)

Step 2.1 — Determine short-term vs long-term

The holding period for US-listed shares in Indian tax law is 24 months (not 12 months as for Indian listed shares).

• Sold within 24 months of vest date → Short-Term Capital Gain (STCG) → taxed at your income slab rate (up to 35.88% for top earners under the new regime)
• Sold more than 24 months after vest date → Long-Term Capital Gain (LTCG) → taxed at 12.5% flat under Section 112 (no indexation benefit)

Use the Holding Period Checker to confirm which bucket each lot falls into. If you sold shares from multiple vest lots, each lot is calculated separately.

Step 2.2 — Navigate to the correct section in Schedule CG

On the portal, Schedule CG has several sub-sections. For US RSU sales, you want:

Schedule CG → B3: Long-term capital gains on assets other than those at B1 and B2 (for LTCG, Section 112)

or

Schedule CG → A4: Short-term capital gains on assets other than those at A1, A2, A3 (for STCG, slab rate)

Do not use the sections for "listed securities" (A1, A2, B1, B2) — those are for Indian-listed shares and equity mutual funds. US shares are unlisted foreign equity for Indian tax purposes, even though they trade on NYSE/NASDAQ.

Step 2.3 — Fill in each field

For each sale (or each lot if you are separating lots), you will fill:

A. Full Value of Consideration (Sale Price in INR)

• Take the USD sale price from your broker statement
• Multiply by the RBI reference rate on the date of sale
• If you sold on multiple days, compute each day separately

Example: Sold 50 shares of MSFT at $415 on 3 March 2026. RBI rate on 3 March 2026 = ₹86.42. Sale value = 50 × 415 × 86.42 = ₹18,13,210

B. Deductions under Section 48

(i) Cost of acquisition

This is the FMV on the vest date (in INR) — the same number that appeared as a perquisite in your salary. You already paid tax on it as salary income; you get to use it as cost basis now.

Example: 50 shares vested on 10 March 2024 at FMV $380. RBI rate on 10 March 2024 = ₹83.12. Cost = 50 × 380 × 83.12 = ₹15,79,280

(ii) Cost of improvement → Enter 0 (you made no improvements to shares)

(iii) Expenditure on transfer

Brokerage commissions and transaction charges incurred on the sale, converted to INR. This is usually small but real. Find it in your broker's trade confirmation.

Example: Commission $4.95 × ₹86.42 = ₹428. Enter ₹428.

C. Capital Gain (auto-calculated)

The portal computes this as: Full Value of Consideration − Cost of Acquisition − Cost of Improvement − Expenditure on Transfer

D. Country code

Select US (United States). This is required for Schedule FSI linkage.

E. Tax payable

• For LTCG (B3): 12.5% of the gain, before surcharge and cess
• For STCG (A4): system calculates at your slab rate

Step 2.4 — Set-off and carry-forward

If you have capital losses (e.g., you sold some lots at a loss), you can set off:

• STCG losses against STCG gains (any asset class)
• LTCG losses against LTCG gains only

Unused losses can be carried forward for up to 8 assessment years. The portal handles set-off automatically in Schedule CYLA (Current Year Loss Adjustment) and Schedule BFLA (Brought Forward Loss Adjustment).

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Part 3 — Schedule FSI: Foreign source income

Schedule FSI is where you tell the IT department that the income you reported in Schedule CG (and any dividends) originates abroad, declare the tax paid in the source country, and claim the Foreign Tax Credit.

Go to: ITR-2 → Schedules → Schedule FSI

Step 3.1 — Understand what goes in Schedule FSI

Schedule FSI covers all income that arises outside India. For RSU holders, this typically includes:

• Capital gains from sale of foreign shares (which you also entered in Schedule CG)
• Dividends received from foreign companies (if any)

It does not include RSU vesting income — that is treated as Indian-source salary income taxable in India regardless of where the company is listed.

Step 3.2 — Add an income entry

Click "Add" to create a new row. For each type of foreign income, fill:

Country Code and Name

Select US – United States. Each row in Schedule FSI is country-specific. If you have income from multiple countries, you will have multiple rows.

Taxpayer Identification Number (TIN) in foreign country

For most Indian RSU holders, this is your US Individual Taxpayer Identification Number (ITIN). If you do not have a US ITIN (most people don't), leave this blank or enter "N/A." The portal accepts blank here.

Head of Income

Select the relevant head:

• Capital Gains — for gain from selling RSU shares
• Other Sources — for dividends received from foreign company shares

Do not select "Salary" — RSU vesting is taxed as Indian salary, not foreign salary.

Income from outside India (in INR)

Enter the amount of foreign-source income in INR:

• For capital gains: the net gain figure from Schedule CG (same number)
• For dividends: gross dividend received in USD × RBI rate on payment date, before any US withholding

Tax paid outside India (in INR)

This is the US tax withheld. For most RSU holders:

• On capital gain from sale: zero (US does not withhold capital gains tax from non-resident aliens on publicly listed US securities)
• On dividends: 25% of gross dividend (under India-US DTAA, with W-8BEN on file), or 30% if W-8BEN not filed

Convert the USD withholding to INR at the RBI rate on the date of dividend payment.

Tax payable on such income under normal provisions in India

This is the Indian tax on the same income:

• For LTCG: 12.5% of the capital gain
• For STCG: your effective slab rate × the capital gain
• For dividends: your effective slab rate × gross dividend amount

Tax relief available (FTC)

The portal auto-calculates this as the lower of:

• Tax paid outside India (US withholding)
• Indian tax payable on the same income

This is the Foreign Tax Credit (FTC) you can claim. For capital gains, this is usually zero (no US withholding). For dividends, you recover most or all of the 25% US withholding.

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Part 4 — Schedule FA: Foreign assets (the disclosure that most people skip)

Schedule FA is the most widely skipped schedule — and the most dangerous one to skip.

Go to: ITR-2 → Schedules → Schedule FA (Foreign Assets and Foreign Source Income)

Step 4.1 — Who must fill Schedule FA

Every Resident and Ordinarily Resident (ROR) who held any foreign asset at any point during the calendar year (1 January to 31 December 2025 for AY 2026-27) must fill Schedule FA. This includes:

• Shares held in a US brokerage account
• ESOPs or RSUs not yet vested (if you have a beneficial interest)
• Foreign bank accounts (including the USD settlement account at your broker)
• Any other foreign asset

"Held at any point" means even if you bought in February and sold in August, you held it during the calendar year and must disclose it.

RNOR and NRI individuals are exempt from Schedule FA for the non-resident period. If you returned to India mid-year and became ROR, disclose assets held after your ROR date.

Step 4.2 — Understand the calendar year trap

Your ITR covers the financial year (1 April 2025 to 31 March 2026). Schedule FA covers the calendar year (1 January 2025 to 31 December 2025). These are different periods.

Example: You bought 10 shares of AAPL on 5 January 2025 and sold them on 20 March 2025. From your ITR perspective (Schedule CG), the sale is in FY 2025-26. From Schedule FA perspective (calendar year 2025), you held the shares during CY 2025. Both disclosures are required.

Step 4.3 — Navigate to the right table

Schedule FA has multiple tables. For RSU holders:

Table A: Details of Foreign Bank Accounts

If your broker maintains a USD cash account in your name (most do), it counts as a foreign bank account. Fill:

Field	What to enter
Country name and code	United States, US
Name of institution	Your broker name (e.g., Morgan Stanley Smith Barney LLC)
Address of institution	Broker's registered address (find in account opening documents)
Account number	Your brokerage cash account number
Account opening date	Date you opened the brokerage account
Peak balance during the period	Highest USD balance during 1 Jan–31 Dec, converted to INR at the RBI rate on that date
Closing balance	Balance on 31 December, converted to INR at 31 Dec RBI rate
Gross interest (if any)	Interest earned on idle cash in the account, in INR

Table B: Details of Foreign Equity and Debt Interests

This is where each stock holding goes.

Field	What to enter
Country name and code	United States, US
Name of entity	Full legal name of the company (e.g., "Microsoft Corporation")
Nature of interest	Direct
Date of acquisition	Date the shares were acquired (vest date for RSUs; each vest is a separate acquisition date if lot-tracking)
Initial investment (cost)	Number of shares × FMV on vest date × RBI rate on vest date, in INR
Peak investment during the period	Highest value of the holding at any point during the calendar year, in INR
Closing value on 31 Dec	Number of shares × closing price on 31 Dec × RBI rate on 31 Dec, in INR
Total gross amount received	Dividends and capital gains received during the calendar year, in INR
Total gross proceeds from sale	Sale price × shares sold × RBI rate on sale date, in INR (if you sold any)

Table D: Details of Foreign Custodial Account

If your broker holds shares in custody for you (which all brokers do — you don't hold shares directly in most cases), some filers include the brokerage account here as well. In practice, most RSU holders use Table B for the equity holdings and Table A for the cash account. The portal accepts both approaches; consistency across years matters more than which table you use.

Step 4.4 — What happens if you miss Schedule FA

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 applies. Penalties:

• ₹10 lakh per undisclosed foreign asset (Section 43 of the Black Money Act)
• Prosecution for concealment in serious cases

There is no minimum threshold — even a ₹1,000 foreign holding must be disclosed. The IT department cross-checks Schedule FA disclosures against FATCA and CRS (Common Reporting Standard) data received from foreign tax authorities. US brokers report Indian accountholders' balances to the IRS under FATCA, which is exchanged with India under the bilateral FATCA agreement.

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Part 5 — Form 67 (Form 44 from AY 2026-27 onwards): Foreign Tax Credit claim

Form 67 is filed separately from the ITR — it is a standalone form on the IT portal. From Assessment Year 2027-28 onwards it has been renumbered Form 44, but the content is identical.

File this before your ITR-2.

Go to: IT portal → e-File → Income Tax Forms → Form 67

Step 5.1 — When you need Form 67

You need Form 67 if any foreign tax was withheld on income you earned abroad. For RSU holders:

• US withholding on dividends: always (25% with W-8BEN, 30% without)
• US withholding on capital gains: usually not applicable (US does not withhold on capital gains of non-resident aliens from listed securities)

If you received no dividends and had no other US-source income with withholding, you do not need Form 67.

Step 5.2 — Fill the Form 67 fields

Assessment Year → Select AY 2026-27

Name and PAN → Auto-filled from your login

Verification → You must verify Form 67 with your Aadhaar OTP or DSC before the system accepts it

Table: Statement of Income from a Country or Specified Territory and of Foreign Tax Credit Claimed

For each country from which you received taxed foreign income, add a row:

Field	What to enter	Where to find it
Country name	United States	—
Country code	US	—
Tax Identification Number	Your US ITIN (or blank if none)	Your broker's 1042-S header
Head of income	"Other Sources" for dividends	—
Income from that country (INR)	Gross dividend in USD × RBI rate on payment date	1042-S Box 2 or broker dividend statement
Tax paid in that country (INR)	US withholding in USD × RBI rate on payment date	1042-S Box 7 or broker statement
Tax payable in India on this income	Your slab rate × gross dividend (INR)	Computed from your tax calculation
FTC claimed (lower of above two)	Lower of (col 5) or (col 6)	Portal computes this

For dividends where 25% was withheld and your slab rate is 30%:

You will recover the full 25% as FTC. The remaining 5% slab rate is payable in India.

For dividends where 25% was withheld and your slab rate is 20%:

FTC is capped at 20% (your Indian tax on that income). You cannot claim FTC beyond your Indian tax liability on the same income. The excess 5% US withholding is not refunded by either country.

Step 5.3 — Submit and note the acknowledgement

After submitting Form 67, note the acknowledgement number. The portal links this to your ITR filing. If you do not file Form 67 before or at the same time as your ITR, the FTC claim in Schedule FSI is denied at CPC processing, and you receive a tax demand.

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Part 6 — Completing and submitting the ITR-2

With Schedules S, CG, FSI, FA filled and Form 67 submitted, the remaining steps are:

Step 6.1 — Verify Schedule TR (Tax Relief)

Schedule TR summarises the FTC you claimed via Form 67 and Schedule FSI. The total FTC here should match the sum of FTC amounts across all Schedule FSI rows. Discrepancies cause CPC processing errors.

Step 6.2 — Check tax computation

Go to Part B – TTI (Tax on Total Income). Verify:

• Total income includes Schedule S (salary with perquisite) + any other income
• Capital gains tax is separately computed at 12.5% (LTCG) or slab rate (STCG)
• FTC from Schedule TR reduces total tax payable
• Advance tax and TDS (from Form 26AS) are deducted
• Net tax payable or refund is as expected

Step 6.3 — Verify the return (mandatory within 30 days)

Without verification, the ITR is treated as invalid. Options:

• Aadhaar OTP — fastest, instant
• Net banking EVC — for select banks
• DSC — if you have a digital signature
• Physical ITR-V — send signed copy to CPC Bengaluru (takes 30–45 days to process, defeats the purpose)

Use Aadhaar OTP unless your Aadhaar-PAN link is broken.

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Common mistakes and how to avoid them

Mistake	What goes wrong	Fix
Filing ITR before Form 67	FTC denied at CPC; tax demand raised	File Form 67 first, then ITR
Using listed-securities section in Schedule CG for US stocks	Wrong tax rate applied (20% instead of slab, or 12.5% LTCG calculated incorrectly)	Use "other assets" (A4 for STCG, B3 for LTCG)
Using 12-month holding period for LTCG	STCG misclassified as LTCG; tax understated; notice under Section 139(9)	Use 24-month threshold for US stocks
Using cost basis as original USD purchase price not FMV at vest	Cost basis understated; gain overstated; excess tax paid	Cost basis = FMV on vest date × shares × RBI rate on vest date
Skipping Schedule FA	Black Money Act penalty up to ₹10 lakh per asset	Disclose every foreign holding, even tiny ones
Using financial year for Schedule FA	Missing holdings from January–March (before April 1)	Schedule FA uses calendar year: 1 Jan–31 Dec
Not converting at RBI reference rate	Wrong INR figures, mismatch with ITR	Use RBI reference rate on each transaction date
Forgetting to disclose foreign cash account	Foreign broker cash account is a foreign bank account	Disclose in Table A of Schedule FA

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Quick document-to-field map

What you need	Where to find it	Which field
FMV on vest date (USD)	Broker release statement	Schedule CG: cost of acquisition (after INR conversion)
Sale price (USD)	Trade confirmation	Schedule CG: full value of consideration (after INR conversion)
Sale date	Trade confirmation	Schedule CG: to determine STCG vs LTCG
US withholding on dividends (USD)	1042-S Box 7	Form 67: tax paid in foreign country
Gross dividend received (USD)	1042-S Box 2 or broker statement	Form 67 and Schedule FSI: income from outside India
Peak holding value during calendar year	Brokerage monthly statements	Schedule FA Table B: peak investment
Closing balance on 31 Dec	Broker statement	Schedule FA Tables A and B: closing values
RBI reference rate on any date	RBI website → Reference Rate	Conversion of all USD figures to INR

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Tools that help

• Schedule FA helper — computes peak value, closing value, and cost basis in INR from USD inputs
• Form 67 / FTC calculator — calculates FTC entitlement from 1042-S values
• Holding period checker — tells you whether each vest lot is STCG or LTCG
• Capital gains calculator — computes net Indian tax on US stock sales
• LRS TCS calculator — shows TCS deducted and refund timeline

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This article is general information, not personalised tax, legal, or investment advice. Tax rules and thresholds described are as of AY 2026-27 and can change. Verify the current position and consult a CA or tax advisor before filing.