Do we have to pay income tax in India for stock options sold in US

POSTED BY Manish Tiwari ON June 19, 2013 4:10 pm COMMENTS (3)

I was working with Indian subsidiary of a US company listed in NASDAQ. I was allotted stock options by the company at the time of joining in Jul 2008. I quit the company in Dec 2012 and joined another company. I exercised and sold the stock options in Dec 2012. The amount was credit to my salary account after deductions such as taxes applicable in US and brokerage fees.

Now I received Form 16 and Form 12BA from my ex employer. Here in Form 12BA, the stock options are listed as perquisites and income tax is deducted on them as standard TDS.

My question is that whether there is double tax treaty between India and USA in this regards. Am I liable to pay income tax in India for these stock options? Or I am exempted from income tax in India because of this double tax treaty. If I am exempted then please explain the steps and documents needed to reclaim this amount from IT department while filing return.

Thanks in advance.

3 replies on this article “Do we have to pay income tax in India for stock options sold in US”

  1. vivek says:

    Manish – what was your final resoultion, I have the same exact scenario. working for the NASDAQ listed company – in their india offices. Grant in 2007, vesting in 2011. exercised in March 2015. (moved to US in Nov 2013 on work Visa for the same company). Tax deducted in US on the entire income at highest federal slab, also with 12BA – tax deducted on the original earning in India as well. – I contacted CA who claims to know DTAA – and also paid for India returns – they are still researching (it has been 2 months).. I think this should be fully refundable from India. –

    Ashal – any views?

    1. Vivek

      I will have to see in detail. Looks like a complicated case 🙂 . Even I would go to CA for this .

  2. Dear Manish, Yes there is a DTAA between India & USA. Please take help of a tax professional to file your ITR.



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