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Foreign ESOP or RSU shares in ITR-2

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The sale of foreign shares gives capital gains, with a 24 month holding period for long term since they are unlisted in India. Residents must also report foreign shares held during the year in Schedule FA. Missing Schedule FA can attract Black Money Act penalties.

Provisions

Sec 2(42A) (now Sec 2(101)); Sec 112 (now Sec 197); Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015

Analysis

The perquisite value at vesting was taxed through salary, and that value becomes the cost for capital gains. Gains on shares held up to 24 months are short term and taxed at slab rates; longer holdings are taxed at 12.5% for transfers after 23 July 2024. Report every foreign holding in Schedule FA for the calendar year, even if sold. Claim credit for any foreign tax using Form 67 (now Form 44) filed before the return.

Close

  1. Get vesting and sale statements from the broker.
  2. Use the vest date value as cost.
  3. Report gains in Schedule CG and holdings in Schedule FA.
  4. File Form 67 if foreign tax was withheld.

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