Meaning

An RSU is an award of stock shares usually given as a form of employee compensation.

• It Doesnot provide any tangible value until they are actually vested.
• RSU's are assigned at Fair Market Value (FMV) when they vest.

Taxation of RSU(when acquired from a Foreign Company)

• Tax at the time of vesting- Tax is payable after adding these shares to the taxable income at FMV less excise price paid(if any).
• Tax at the time of Selling

         a) If sold within 24 months from the date of acquisition- It will be treated as STCG- Chargeable at slab rate applicable to assessee.

         (b) If sold after 24 months from the date of acquistion- It will be treated as LTCG-Chargeable at 20% along  with indexation benefit.

Conversion Rate- RSU acquired and sold from a foreign company,when sold, is converted into Indian Rupees at the prevailing RBI rates on that day.

Schedule FA-  Any foreign Shares or assets acquired has to be reported in Schedule-FA while filing ITR.

ITR to be filed- We need to file ITR-2(considering there is no other business income or any income/loss from trading in shares). 

Dividend Income Acquired from Foreign Holding/RSU-

Dividend income earned on the foreign shares held is taxable in India(in case of a resident person). However, if any tax is being paid in foreign country on that income, it can be claimed as a relief while filing ITR in India. 

Time limit for claiming relief:

Relief can be claimed any time in the Assessment year by filing Form-67.