I know similar questions have been asked before, but I haven’t found a concrete answer yet.

My company is listed on NASDAQ and issues RSUs & ESPP. The ESPP shares are allotted at a discount of 15% of the Fair Market Value (FMV) on the purchase date (PD).

Purchase Price (PP) = 15% of FMV

So my perquisite value is FMV-PP and this is added to my taxable income & tax is deducted during the month when the shares are purchased (irrespective of whether I sell the ESPP shares immediately or hold on to them).

Now assuming that I don’t immediately sell the shares, what would be the tax liability in the following scenarios.

1. I sell them before 1 year from PD but the selling price is MORE than FMV on PD.

2. I sell them before 1 year from PD but the selling price is LESS than FMV on PD.

3. I sell them after 1 year from PD but the selling price is MORE than FMV on PD.

4. I sell them after 1 year from PD but the selling price is LESS than FMV on PD.

In case of (2) and (3) can I claim loss on investment/tax refund (because I paid tax on a higher value, but I sold it for a lesser value)??

Manish could you please write an article on the taxation of ESPP & RSU of a foreign company listed in a foreign stock exchange? It would help many of us.