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The Nasdaq Just Repriced Your RSUs: What the 2026 Tech Selloff Means for NRIs Holding US Stock

A tech selloff cut US RSU values. What it means for NRIs: the tax paid at vesting, how a loss on sale is treated, and who must report on Schedule FA.

Rakesh Sinha, NRI Finance WriterReviewed 10 June 20268 min read

A software engineer in the Bay Area wrote to me after the Nasdaq's second straight session of losses, with one tech server maker down more than 11% in a day and the AI trade wobbling. His Google RSUs had vested at a much higher price a few months earlier, and he wanted to know whether the tax he paid at vesting "comes back down" with the share price. It does not, and understanding why is the difference between making a clear-headed decision now and making an expensive emotional one.

The 30-second answer: A US RSU is taxed as salary or a perquisite at vesting, on the full market value that day, and that tax event is locked even if the stock then falls. After vesting you simply hold shares at a cost basis equal to the vesting-date price, so a selloff is an unrealised capital loss, not a refund of tax paid. For a non-resident NRI, gains and losses on US-listed shares are foreign-sourced and not taxable in India; they are dealt with where you are resident, such as the US. The India dimension switches on when you become Resident and Ordinarily Resident, when global gains, losses and Schedule FA disclosure all apply. Decide to hold or sell on portfolio grounds, not on the sunk tax. Avoid over-concentration in your employer's stock.

This is a News piece tied to this week's market move, not a full RSU manual, so it stays on the decisions an NRI at a US tech employer faces right now. If you want the end-to-end mechanics, the RSU and ESOP taxation guide is the deep dive, and the ESOP and RSU ITAT ruling commentary covers a recent case worth knowing.

The point everyone gets wrong: vesting tax is sunk

An RSU has two separate tax moments, and conflating them is the root of the confusion.

The first is vesting. When your RSUs vest, the market value of the shares on that date is treated as employment income, salary or a perquisite, and taxed accordingly. Your employer typically withholds shares or cash to cover it. This is done and dusted on the vesting-day value. If you vested 100 shares at USD 200 each, you were taxed on USD 20,000 of income, regardless of what the stock does next.

The second moment is sale. Once vested, the shares are yours at a cost basis equal to that vesting-date price, here USD 200. From that point they behave like any other stock you bought at USD 200. If the price falls to USD 150 and you sell, you have a capital loss of USD 50 a share. If it rises to USD 260 and you sell, you have a capital gain of USD 60 a share.

So when the Nasdaq drops and your vested RSUs fall from USD 200 to USD 150, you do not get the vesting tax back. You paid income tax on USD 20,000 that is now worth USD 15,000. That gap is a capital loss you can potentially use, not a tax refund. The honest framing: the tax you paid at vesting is sunk, and holding the stock afterward is a fresh investment decision at the current price. Ask yourself whether you would buy this stock today at USD 150. If the only reason you are holding is the price you "paid" in tax, that is the sunk-cost trap.

Where the loss is actually taxable: it depends on your residency

This is where NRIs need to be precise, because the answer is not the same for everyone, and a lot of generic advice gets it wrong by assuming Indian tax always applies.

India taxes a non-resident only on income that arises or accrues in India. A gain or loss on US-listed shares held in a US brokerage is foreign-sourced, so for a pure NRI it is not in the Indian tax net at all. It is a matter for the country where you are resident. A California-based NRI who sells RSUs at a loss is dealing with US federal and state capital-loss rules, not an Indian return.

The India dimension becomes live in two situations:

First, if part of the vesting period was served while you were in India, the vesting perquisite can be apportioned, and the India-attributable slice is taxable in India with foreign tax credit available to avoid double taxation. The foreign tax credit and Form 67 guide covers the credit mechanics, and the India-US DTAA deep dive covers how the treaty allocates taxing rights.

Second, and more commonly, once you return to India and become Resident and Ordinarily Resident, your global income is taxable in India. At that point a sale of US shares produces a capital gain or loss that goes into your Indian return, and the loss set-off and carry-forward rules apply, as the capital loss set-off guide explains. Note that foreign shares are not covered by Section 115AD, the regime for Indian securities, so do not assume the 12.5% or 20% Indian rates that apply to listed Indian shares; foreign-share gains follow their own holding-period and slab logic for a resident.

A worked example through the residency transition

Take Priya, who vested 200 shares at USD 200 while working in the US as an NRI, then the stock fell to USD 150.

While she is a US-resident NRI: the USD 40,000 vesting income was US-taxed, India does not tax it (no India service period here), and if she sells at USD 150 the USD 10,000 loss is a US capital loss. India is not involved. She files no Schedule FA in India because she is non-resident.

Now suppose Priya moves back to India and, after her RNOR period ends, becomes ROR, still holding the shares at a USD 150 market price. From that year she must disclose the US brokerage and the shares on Schedule FA in her Indian return, every year she holds them, as the Schedule FA guide sets out. If she later sells as an ROR at USD 160, the gain over her USD 200 basis is still a loss of USD 40 a share in rupee terms (converted at the relevant exchange rates), usable under Indian set-off rules, with any US tax credited via Form 67. The same shares, the same person, two completely different Indian outcomes depending on residency.

What to actually do this week

Do not sell purely to "realise the loss" unless it fits your plan. Loss harvesting can be sensible where the loss is actually usable against gains, but for an NRI whose shares are not in the Indian tax net, an Indian-tax-driven harvest does nothing, and a US-tax wash-sale rule may apply if you rebuy too soon. Decide on portfolio grounds.

Check your concentration. The real risk this selloff exposes is not the tax, it is over-exposure to one employer's stock. If vested RSUs plus unvested grants plus your salary are all tied to a single tech company, a drawdown hits your net worth and your job security together. The investing windfall or bonus guide and the asset allocation guide both argue for diversifying vested stock on a schedule rather than holding it all.

If you are planning to return to India, map the FA and residency switch before you land. The jump from non-resident to ROR changes everything about how this stock is taxed and reported, and the RNOR window is the planning opportunity, as the RNOR residency guide explains.

Edge cases worth flagging

Unvested RSUs. A falling price lowers the value of grants that have not vested yet, but there is no tax until they vest, and the eventual vesting tax will be on the (lower) value at that future date. Nothing to do now except factor it into your concentration view.

ESPP shares. Employee stock purchase plan shares follow different basis and discount rules from RSUs; do not assume identical treatment.

You sold in a panic and rebought. In the US, the wash-sale rule can disallow the loss if you rebuy substantially identical stock within 30 days. Check before assuming the loss is bankable.

The closing read

A tech selloff is uncomfortable, but the tax myth makes it feel worse than it is. You did not "lose the tax" when your RSUs fell; you paid income tax at vesting and now hold stock at that basis, full stop. For a non-resident NRI, the move is a question for your country of residence, not for India, and India only enters the picture through an India service period or once you return and become ROR, at which point Schedule FA and global-income rules apply. The decision in front of you is the one you would face with any concentrated stock position: hold or trim on the merits, manage your exposure to a single employer, and ignore the sunk tax. The selloff is a reminder to diversify, not a tax emergency.

Related guides

This guide is educational and general in nature. It is not individual financial, tax, or legal advice. The taxation of RSUs depends heavily on your residency, your vesting timeline and the country where the income arises, and rules change, so confirm your specific position with a qualified cross-border tax adviser before acting.

Frequently asked questions

If my US RSUs fall in value after vesting, do I get the tax back?

No. An RSU is taxed as salary or a perquisite at the moment it vests, on the full market value that day, and that tax event is locked. If the share price then falls, you do not recover the tax paid at vesting. What you have instead is a capital position: your cost basis is the vesting-date value, and the drop from there is an unrealised capital loss until you sell. Whether that loss is usable against other gains depends on your tax residency and where the shares are taxable. The practical takeaway is that holding vested RSUs is the same as holding any stock at that price, and you should decide to hold or sell on portfolio grounds, not on the sunk tax you already paid.

Are capital gains on US shares taxable in India for an NRI?

Generally no, while you are a non-resident. India taxes a non-resident only on income that arises or accrues in India, and a gain on US-listed shares held abroad is foreign-sourced, so it is not taxable in India for a pure NRI. It is taxed where you are resident, for example the United States. The India angle becomes live when you are a Resident and Ordinarily Resident, or in some cases during the part of a vesting period when you worked in India, because then global income is in scope. So a US-based NRI selling US RSUs at a loss has a US tax matter, not an Indian one, while a returned NRI who has become ROR must bring the gain or loss into the Indian return.

Do NRIs have to report US RSUs on Schedule FA in India?

Schedule FA, the foreign asset disclosure in the Indian return, applies to a Resident and Ordinarily Resident, not to a non-resident or to someone who is Resident but Not Ordinarily Resident. So while you are an NRI you do not file Schedule FA, and your US brokerage and RSUs are not reported there. The obligation switches on once you return and your status becomes ROR, usually after the RNOR window closes, at which point your US shares, vested and unvested, and your brokerage account must be disclosed on Schedule FA for each year you hold them. Missing this once you are ROR carries serious penalties, so map the transition before you return.

Rakesh Sinha, NRI Finance Writer

Rakesh Sinha is a technology professional and an NRI since 2016. He holds a master’s from Carnegie Mellon University and a BTech in Computer Science from IIT Guwahati, and has worked at Microsoft, Cisco, InMobi and Google across Bengaluru, the United States and London. He has personally navigated the decisions these guides cover: moving foreign salary and tech-company RSUs across borders, opening NRE, NRO and FCNR accounts, filing Indian returns as a non-resident, and claiming DTAA relief between the US, UK and India. How these guides are written and reviewed.

Disclaimer: This guide is educational and general in nature. It is not individual financial, tax, or legal advice. Tax and FEMA rules change and your situation may differ, so confirm specifics with a qualified chartered accountant or financial adviser before acting. See our editorial standards for how these guides are researched, reviewed and updated.