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Foreign shares, RSU and ESOP sale with Schedule FA

  • Shares of a foreign company are not listed in India, so they are long term only after 24 months: long-term gains are taxed at 12.5% and short-term gains at your slab rate.
  • Deadline: With the ITR (AY 2026-27: 31 July 2026 for ITR-2). Schedule FA covers holdings in calendar year 1 January to 31 December 2025 for AY 2026-27. Form 67 (now Form 44) by the end of the assessment year if the return is filed under Sec 139(1) or 139(4) (now 263(1) or 263(4)).
  • Done in 3 working days after broker annual statements and vest history
  • Prepared by your Savvy, checked by a CA
  1. Broker annual statements
  2. Are you resident and ordinarily resident this year
  3. Collect broker statements for the financial year
  4. Lot-wise foreign gains working in rupees
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Answer in brief

Shares of a foreign company are not listed in India, so they are long term only after 24 months: long-term gains are taxed at 12.5% and short-term gains at your slab rate. You must also list every foreign account and share in Schedule FA every year, even if you sold nothing. We compute gains using your vest values as cost, convert to rupees, fill Schedule CG, FA and Form 44 (old Form 67), and check for missed earlier years.

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From the official sources

What the law says, and what trips people up

From the official portal's manuals and FAQs, with the source for each point.

The law

  • Income-tax Act 1961, Sec 2(42A) (now Sec 2(101))

    Assets other than listed securities and equity fund units are long term after 24 months for transfers on or after 23 July 2024; foreign shares follow the 24-month ruleSource

  • Income-tax Act 1961, Sec 112 (now Sec 197)

    Long-term gain at 12.5% without indexation for sales on or after 23 July 2024; short-term gains taxed at slab ratesSource

  • Income-tax Act 1961, Sec 17(2)(vi) (now Sec 17(1)(d)) and Rule 3(8) (now Rule 15)

    Value of shares allotted under ESOP is a salary perquisite: FMV on the exercise date minus amount paidSource

  • Income-tax Act 1961, Sec 49(2AA)

    Cost of such shares on sale is the FMV used for the perquisiteSource

  • ESOP holding period

    Holding period for capital gains starts on the allotment dateSource

  • Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015, Sec 42 and 43

    ₹10 lakh penalty for failure to disclose, or inaccurate disclosure of, foreign assets in the return; from 1 October 2024 not applicable where aggregate value of assets other than immovable property is below ₹20 lakhSource

  • ITR-2 Schedule FA

    Report foreign assets and foreign-source income; not required for non-residents or not ordinarily residentsSource

  • Income-tax Rules 1962, Rule 128 (now Rule 76; as amended by Notification 100/2022)

    Form 44 (old Form 67) for foreign tax credit may be filed on or before the end of the assessment year where the return is filed under Sec 263(1) or 263(4) (old Sec 139(1) or 139(4))Source

  • Income-tax Act 2025, Sec 197 (corresponds to old Sec 112)

    From tax year 2026-27, long-term gains on foreign shares continue at 12.5% under Sec 197Source

  • Government fee

    No government fee. Tax on gains at 12.5% (long term) or slab rate (short term) plus surcharge and cess, less eligible foreign tax credit. Source: https://zerodha.com/varsity/chapter/foreign-stocks-and-taxation/

  • Late fee or penalty

    Black Money Act penalty of ₹10 lakh per default for missing or wrong Schedule FA (relief where non-immovable foreign assets total below ₹20 lakh, from 1 October 2024). Source: https://www.rashminsanghvi.com/downloads/taxation/Foreign%20assets-Schedule%20FA-%20Rutvik%20Sanghvi-July2026.pdf . Late return fee under Sec 428 (old Sec 234F). Source: https://www.incometaxindia.gov.in/w/section-234f . Interest under Sec 424 and 425 (old Sec 234B and 234C) if advance tax on the sale is skipped. Source: https://taxguru.in/income-tax/red-alert-capital-gains-tax-us-listed-rsu-esop-share-sales.html

On the portal

  1. e-File > Income Tax Forms > Form 67 (if claiming foreign tax credit); file before the return
  2. e-File > Income Tax Returns > File Income Tax Return > AY 2026-27 > ITR-2
  3. Personal information: confirm resident and ordinarily resident status
  4. Schedule CG: enter foreign share sales under 'other assets' with dates, sale value, cost; long term only if over 24 months
  5. Schedule FA: enter foreign custodial account and foreign equity holdings for calendar year 2025 with initial, peak and closing values and income
  6. Schedule FSI and TR for any foreign tax credit; pay and e-verify

What trips people up

  • Foreign shares treated as long term after 12 months

    They are not listed in India; long term only after 24 monthsSource

  • No Schedule FA because nothing was sold

    Holdings must be disclosed for every calendar year they are heldSource

  • Exercise price used as cost, so the perquisite is taxed twice

    Cost is the FMV used for the perquisite under Sec 49(2AA)Source

  • Sale omitted because it is not in AIS

    Foreign sales usually do not appear in AIS; the department gets data through FATCA and CRSSource

  • Foreign tax credit denied for late Form 67

    File Form 67 by the end of the assessment year; tribunals have treated the date as directory, but do not rely on itSource

  • Filed ITR-1 with foreign shares

    ITR-1 cannot be used by anyone holding a foreign asset; use ITR-2Source

People ask

Which period does Schedule FA cover for AY 2026-27?

The calendar year 1 January to 31 December 2025.Source

Do unvested RSUs go in Schedule FA?

Practitioner guidance: nothing is reported while unvested; vested but unexercised awards are shown at nil value; exercised shares at cost.Source

What rate on US shares held 30 months?

Long term, 12.5% without indexation for sales from 23 July 2024.Source

I am RNOR after returning from abroad. Do I fill Schedule FA?

No. Schedule FA is not required for non-residents or not ordinarily residents.Source

When is my RSU holding period counted from?

From the allotment date, and the cost is the FMV taxed as perquisite.Source

IDFD

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Step 1 of 4 · What we need from you

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  • Broker annual statements, January to December
  • Vest and exercise history with FMV
  • Sale confirmations (trade date, proceeds)
  • Form 130 (old Form 16) showing RSU perquisite
  • Foreign tax withholding statementOptional
  • SBI TT buying rates for dates used
  • Residential status for the year
  • Previous years' ITRsOptional

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Yearly. Delivered in 3 working days after broker annual statements and vest history. Due: With the ITR (AY 2026-27: 31 July 2026 for ITR-2). Schedule FA covers holdings in calendar year 1 January to 31 December 2025 for AY 2026-27. Form 67 (now Form 44) by the end of the assessment year if the return is filed under Sec 139(1) or 139(4) (now 263(1) or 263(4)).

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