Hi @Quicko ,
My employer assigned me some stock as part of RSU stock options plan. Few of them are now vested and I am allowed to sell.
My question is, what would be taxation if I sell within 1 year ? 2 years ? And in 3 years ? Where can I find more details about the taxation and the rules about if the sold asset is done under loss / profit ?
Thanks
if you sell it before 2 years, it will be taxed as STCG and you need to pay tax as per your tax slab. If sold > 2 years, it will be taxed as 20% with indexation benefit.
Note: Tax is applicable when the RSU’s will get vested and not when you sell it.
@Quicko can confirm
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Thanks for your reply Jack. Isn’t the case for even selling ? I hear it’s double taxed – one when the stock get vested and two when I am selling.
+1 to what @Jack_R said above.
To clarify…
Typically,
-
Income-tax (as per one’s tax slab) is applicable when the RSUs vest.
-
Subsequently, upon sale of the shares,
capital-gains tax will be applicable is any gains between the price at which RSUs vested and the final sale-price.
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Yes, you need to pay the capital gain tax when you sell it.
Note: You do not need to pay the capital gain tax if you sell the shares immediately after it is vested (on the same day)
(Sorry to be pedantic )
Of course, we need to pay capital-gains tax even if the shares are sold on the day they vest.
That too STCG-tax, as the vested shares were held for < 2years.
However, the expectation is that the price movement between the vest-price and sale-price is minimal (same day) and hence the STCG (and STCG-tax) will be minimal as well.
Also, in case the share price falls below the vest-price,
and if one eventually sells the shares below the vest-price,
then one can declare/claim the capital-loss and use it to offset other capital-gain that one may have.
Note: Such a capital-loss cannot be used to offset the perquisite income-tax paid when the RSUs initially vest.
every were TAX – this is country or this country is created for only collecting TAX purpose
so only most of indian are surrender their passport and setling in DUBAI , etc
but i dont have such chance
I went to buy small car
car price is 9 lakhs but 3.5 lakhs is coming extra to pay tax and GST , so i skip to purchase car , i never want to give TAX to this bullshut GOVT , i happy to use UBER Now
i will never go to high restaurant , or malls , or hypermarket ,
i will buy all in small shop only
Thanks for all your replies and with detailed answers.
Let’s say share price vested at 200 usd and I sell it during the downturn of the stock at 150. Do I still need to pay the taxes?
Thanks
Precisely the behaviour that the policy is trying to incetivize.
Well done.
You are good at “playing the game”
You mean the following scenario, right?
No capital gains. So, capital-gains tax.
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Thank you very much for your response. I have missed reading .
Does this mean I can only offset for capital gains tax ? Meaning I can’t use this to offset overall tax. Can I?
Another question, can I offset losses in the US market against the gains in the Indian market?
Thanks