RSU – Impact of Exchange rate

POSTED BY Sarangarajan Tirucherai ON July 30, 2013 11:32 pm COMMENTS (3)

Here is the question

Assuming I am provied 70  shares on 10/Dec/2012 post tax (100 RSU provided and 30 shares sold to cover the tax). On that the share prices was $20 and assume 1USD = INR 55

 

Now if I sell today the share for same price 20 USD but the conversion rate is 60 (1USD=INR 60) — do i need to include 70 * 5 = INR 3500 as part of income (< 1 year and hence Short term) 

 

3 replies on this article “RSU – Impact of Exchange rate”

  1. Dear Sarangarajan, you were awarded 100 RSU actually. So the perk value should be counted for 100 RSU. As you sold now 70 RSU only, I think it’s STCL & not gain.

    thanks

    Ashal

  2. Sarangarajan Tirucherai says:

    Dear Manish,

    Please note that RSU 70 i had provided is post tax paid — meaning say if on 10-Dec-2012 100 RSU vest — then on same day 30 is sold (for what value in USD on that day) and provide me with 70 shares only — so i have already paid tax for that

    So it is like assuming on 10-Dec-2012 I have purchased in NASDAQ 70 shares each for 20 USD. — on that day the 1 USD = INR 55

    Today when I sell this share (01-Aug-2013) in NASDAQ 70 shares each for 20 USD (no price escalation) — i will get 1400 USD but converted in INR = 1400 *60

    So as per your explanation — we calculate the gain in USD then multiply the current INR value and consider that as total Gain

    So if in USD there is no gain (even though because of exchange price difference we get some money) we dont have to pay tax

  3. What would matter actually be the share price difference in US terms , assuming its a US listen stock , so the tax would be based on that amount . When you get the money in India. In case of RSU , the whole amount is your INCOME , so you will pay tax on the whole amount.

    Manish

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