Taxation on RSU, ESOP, ESPP – working in US based MNC

POSTED BY ranjithkumarnair ON March 1, 2014 11:29 am COMMENTS (3)

Hi, I have RSU, ESOP & ESPP stocks and working for a US based MNC. I know there are lot of answers around how earning from these stocks will be taxed in India but still I am little confused so would like to check on these

RSU: I have almost every year RSU allotted to me by my company and they vest in 4 years (25% per year after the 1 st year). E-Trade with holds certain number of shares towards Tax when the RSU is released and vesting.

– Does this mean – I do not have to pay any tax when I sell RSU shares and get the money in my India Savings Account through E-Trade + Intermediary Bank (JP Morgan-Chase) ?

ESOP: I got some when I joined my company back in 2004. They have vested long time back but I was not able to sell them as the company stock price was going down but recently company stock price is going up that I will be able to sell my ESOP s now for a marginal profit.

I don’t think any shares from ESOP is with held as such towards Tax by E-Trade or the company. So when I sell them this year (this year being the last year I can sell as it has 10 year expiry) – will the profit be taxable in India? & will this is capital gain?

ESPP: I have been buying my company shares at a 10% discounted rate for the lsat few years. Money from my salary is used (10% of Salary) is used to buy these shares. Since it is bought from my taxed salary – will this still attract Tax when I sell them?

Thanks

Ranjith

3 replies on this article “Taxation on RSU, ESOP, ESPP – working in US based MNC”

  1. ashalanshu says:

    Dear Ranjith, as you are working from India, all the global income is taxable to you.

    Thanks

    Ashal

  2. ashalanshu says:

    Dear Ranjith, please read this first. with the comments also.

    http://jagoinvestor.dev.diginnovators.site/2013/03/rsu-espp-esop-meaning-and-tax-treatment.html

    Thanks

    Ashal

    1. ranjithkumarnair says:

      Thanks Ashal. I have gone through this article already and it is very informative. But it does not still clarify the point on Tax on ESOP & ESPP. Double Tax Treaty between India & US is there so I assume the gain I get from my RSU s need not be taxed in India but what about ESOP & ESPP. Also DTTA (Double Tax Treaty Agreement) talks about NRI – people who work in abroad & earn money. It does not seem to call out cases w.r.t People working in US MNC in India and earning from Stocks listed abroad (US). Correct me if I am wrong w.r.t DTTA

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