RSU and ESOP Taxation for NRIs: The Sourcing Rule That Decides Everything, and Why Indian-Company Grants Are a Different Animal

In November 2025 an Income Tax Appellate Tribunal upheld a Rs 20.45 lakh demand against a man who was, on the day he exercised his stock options, a tax resident of the UAE. He had moved to Dubai, he was an NRI by every test, and he assumed that the gain on options he cashed in while living in a zero-tax country was nothing to do with India. The Tribunal disagreed. The options had been granted in 2007 for work he did in India, and that fact, not his Dubai residence years later, fixed where the income belonged. Section 9(1)(ii) sources salary and the perquisite element of equity compensation to where the service was rendered. He rendered it in India, so India taxed it, residence at exercise be damned.

That ruling is the cleanest illustration of the principle this entire guide turns on, and it cuts both ways. The Seattle engineer who sold US-employer RSUs that vested entirely for US service, while a non-resident, owes India nothing on either the vesting or the sale, and an accountant who tells him otherwise is wrong. The Dubai man who exercised options earned in Bengaluru owes India plenty, and an accountant who tells him his NRI status saves him is also wrong. The dividing line is never where you live when the money lands. It is where you worked when you earned it, whose company issued the shares, and your residential status in the specific year a gain crystallises.

The 30-second answer: RSUs and ESOPs trigger two taxable events: a perquisite under Section 17(2)(vi) at vesting or exercise, then capital gains at sale. The perquisite is sourced under Section 9(1)(ii) to where you rendered service across the grant-to-vest period, so residence at exercise does not control. An NRI working abroad for the whole period is not Indian-taxed on the perquisite; apportionment applies if part of that period was Indian service, and an Indian-company grant stays Indian-source. Foreign company shares are long-term after 24 months, taxed at 12.5% without indexation under Section 112(1) for transfers on or after July 23, 2024, but only if you are resident in the year of sale. Schedule FA binds only ROR individuals. Foreign tax credit goes via Form 67.

This guide is part of our NRI tax filing series for AY 2026-27. If you want the full return-filing picture, including which ITR form to file and the 31 July 2026 deadline for the non-audit case, start there and use this guide for the equity-compensation detail.

What follows is the part that decides your bill: the two taxable events, the sourcing rule that determines whether the perquisite touches India at all, why an Indian-company grant behaves nothing like a foreign one, how apportionment works when your grant-to-vest period straddled India and abroad, the capital gains rules on the sale, why your cost basis stops you being taxed twice, when Schedule FA switches on, and how the foreign tax credit and Form 67 work after the 2024 timing relaxation. I flag honestly where the positions are genuinely debated, because several of them are.

Get your residential status straight, because the rate hangs on it but the source does not

Two separate questions decide your Indian tax on equity compensation, and conflating them is where most errors begin. The first is source: is this income Indian-source or foreign-source? The second is status: are you a non-resident, RNOR, or ROR in the relevant year? Source is fixed by where you worked and what you hold. Status is fixed by your days of physical presence in India that year, not by your visa, passport, or what your bank labels your account.

The three buckets that matter: a Non-Resident (NRI), broadly under 182 days in India in the year, with a tighter 120-day trap for high-Indian-income cases, taxed only on Indian-source income; Resident but Not Ordinarily Resident (RNOR), the transition status for the first year or two after you return, resident but with foreign income still largely outside the net; and Resident and Ordinarily Resident (ROR), taxed on worldwide income and the only status that files Schedule FA.

Here is the trap people fall into. They assume that being a non-resident is a force field around all equity-compensation income. It is not. Non-resident status protects you only from tax on foreign-source income. If the income is Indian-source, your NRI status does nothing, which is exactly what the Dubai man discovered. So the order of operations is always: first work out the source, then apply your status. Confirm your status for the year using our NRI residency and RNOR rules guide, then read on for the sourcing, which is the part the residency guide does not cover.

Two events, two heads of income, and only the appreciation is taxed twice over

Equity compensation is taxed at two moments under two different heads, for residents and non-residents alike. What changes by status and source is whether each event reaches India.

The first event is the perquisite, at vesting for RSUs or exercise for ESOPs. The value you receive is treated as a perquisite, part of salary income, under Section 17(2)(vi). The taxable amount is the fair market value of the shares on the vesting or exercise date, less anything you paid. For an RSU you usually pay nothing, so the whole FMV is the perquisite; for an ESOP it is FMV on exercise minus the exercise price. This is salary, taxed at slab rates, and where it is Indian-taxable an Indian employer captures it through TDS under Section 192.

The second event is the capital gain, at sale. The gain is the sale price minus your cost of acquisition, and your cost is the FMV that was already taxed as a perquisite at the first event. The holding period starts from the vesting or exercise date, not the grant date. This is the single most lucrative point in the whole guide and the one most often botched on the return: the two events do not stack on the same value. The perquisite taxes value up to the vesting-date FMV; the capital gain taxes only the appreciation after that. Get the cost basis wrong and you compute a gain on the full sale proceeds, which can double or triple your apparent tax for no reason. We will return to this with numbers.

The sourcing rule decides whether India sees the perquisite at all

This is the principle the opening rulings turned on, so it deserves to be stated precisely. Salary income, and the perquisite element of equity compensation, is sourced under Section 9(1)(ii) to the place where the services were rendered. Income for service rendered in India is Indian-source. Income for service rendered outside India is foreign-source. CBDT Circular 2/2021 confirms that the perquisite on equity compensation is taxable in India only to the extent the service was rendered in India.

The service that earns the award is the service performed across the period from grant to vest, the stretch during which you must keep working to earn the shares. So the perquisite that crystallises on vesting is treated as compensation for that grant-to-vest service, sourced to wherever you physically rendered it. Your residence on the vesting or exercise date is irrelevant to source. That is the entire holding of the November 2025 Tribunal decision: the man was a UAE resident at exercise, but the options had been earned for Indian service years earlier, so the source was India and his NRI status changed nothing.

The clean case for an NRI runs the other way, and it is just as binding. If you were a non-resident working entirely abroad for the whole grant-to-vest period, the perquisite is foreign-source and is not taxable in India. It does not matter that the shares are in a foreign company, that you hold an Indian passport, or that you keep an NRO account. The income arose for foreign service, you were a non-resident when it accrued, and India does not tax a non-resident's foreign-source income. The Seattle engineer had exactly this fact pattern.

Two cautions before you celebrate the clean case. First, this is only the Indian position. Your country of residence will usually tax that same vesting income at full local rates as employment income; the US and UK certainly do. Second, the clean answer holds only when the entire grant-to-vest period was foreign service. The moment any slice of that period was Indian service, you apportion, and that is the real-world case for most people who relocated mid-grant.

Indian-company grants are a different animal, and the difference is expensive

Almost every NRI RSU guide quietly assumes the shares are in a foreign company, a US or UK parent. For a large share of returning Indians, especially anyone who held options in an Indian listed company before moving, that assumption is wrong and the consequences are severe. The distinction matters at both events.

On the perquisite, the sourcing rule applies the same way to both: it follows where you worked across the grant-to-vest period. But the people most likely to have an Indian-company grant are precisely the people who earned it for Indian service before they left, which makes the perquisite Indian-source and fully taxable here even after they become non-resident. That is the Dubai man's exact situation: an Indian bank's options, earned in India, taxed in India despite a UAE residence at exercise.

The sharper divergence is at the sale. A capital gain is Indian-source if the asset transferred is situated in India, and shares of an Indian company are an Indian asset under Section 9(1)(i), regardless of your residence. So when a non-resident sells shares of an Indian company received through an ESOP, that gain is taxable in India. Contrast the foreign case: when a non-resident sells shares of a foreign company, the asset sits abroad, the gain is foreign-source, and India does not tax it. So the same person, holding the same notional value of stock, faces an Indian capital gains tax on an Indian-company grant and zero Indian tax on a foreign-company grant, purely from where the issuing company is incorporated.

The rate on those Indian-company shares depends on listing. Listed Indian-company shares sold on the exchange with STT paid run through Sections 111A and 112A, so the long-term gain after 12 months is 12.5% above the Rs 1.25 lakh annual exemption, and short-term is 20%. Unlisted Indian-company shares are long-term after 24 months at 12.5% without indexation under Section 112. The mechanics for Indian listed equity, including the surcharge cap and the basic-exemption trap that hits NRIs, are in our capital gains tax for NRIs on shares and mutual funds guide; this guide stays on the cross-border equity-comp angle.

Apportionment: when the grant-to-vest period straddled India and abroad

The realistic case is messier than "all abroad" or "all in India". Plenty of NRIs were granted RSUs while working in India, then relocated, and the shares vested abroad, so the grant-to-vest period straddled both countries. The perquisite is then split.

The approach revenue authorities apply, and the one tribunals have endorsed, is pro-rata apportionment by the period of service in each country during the grant-to-vest window. The fraction of that window spent rendering service in India makes that fraction of the perquisite Indian-source, and therefore taxable here even if you are a non-resident on the vesting date, because Section 9(1)(ii) sources it to India regardless of status. The remaining fraction, for foreign service, is foreign-source and stays out of the Indian net while you are non-resident.

Put real numbers on that. Priya was granted 400 RSUs by her employer's US parent on April 1, 2022, with a four-year vest. She worked in India from grant until March 31, 2024, then relocated to the US and became a non-resident of India from FY 2024-25. A tranche of 100 RSUs vested on April 1, 2025, when the share FMV was Rs 8,000, so the perquisite on that tranche is 100 times Rs 8,000, which is Rs 8,00,000. The grant-to-vest window for this tranche runs from April 1, 2022 to April 1, 2025, three years or 36 months, of which she rendered service in India for 24 months and abroad for 12. Apportioning pro-rata, the Indian-source fraction is 24 of 36 months, two-thirds, so two-thirds of Rs 8,00,000 is Rs 5,33,333; the foreign-source fraction is one-third, Rs 2,66,667.

Priya was a non-resident on the vesting date, yet India taxes the Indian-source Rs 5,33,333 as a perquisite at slab rates, because the source rule overrides her residence, and she has to file an Indian return precisely because she now has Indian-source income. The foreign-source Rs 2,66,667 stays out of the Indian net while she is non-resident, though the US will tax the full vesting amount under its own rules. The counterfactuals make the stakes plain: had the entire window been Indian service, the whole Rs 8,00,000 would be Indian-taxable and her Indian bill at the 30% slab plus cess would be roughly Rs 2,49,600 rather than around Rs 1,66,400; had it been entirely foreign service, none of it would touch India. The apportionment fraction is the whole game, and on a large grant it moves lakhs.

This is one of the areas where I want to be honest about the limits of certainty. The Act lays down no single statutory apportionment formula for cross-border equity comp. The pro-rata-by-period approach rests on Section 9(1)(ii), CBDT Circular 2/2021 and a line of tribunal decisions, and it is what most professionals will sign off on, but the precise mechanics are not codified: whether to count grant-to-vest or only the portion after grant, whether calendar days or working days, how to treat a partial month, and how to handle multiple overlapping tranches. The January 2026 Budget commentary flagged exactly these gaps as a live source of disputes for returning Indians and expatriates, and the absence of formal rules has produced inconsistent assessing-officer treatment. For a large grant that straddled a relocation, get the apportionment reviewed in writing rather than running it off any blog's formula, this one included.

Capital gains on the sale, where status in the year of sale decides everything

Now the second event, and here residence in the year of sale does the heavy lifting, in contrast to the perquisite where source dominated.

Start with status, because it can make the whole question vanish. For a non-resident selling shares of a foreign company, the gain is foreign-source and not taxable in India. If you sell your US or UK RSU shares while still an NRI, India does not tax that gain at all. This is the other half of the Seattle engineer's situation and why his accountant's instinct to report an Indian capital gain was wrong. The exception, repeated from above because it traps people, is the Indian-company share, which is an Indian asset and taxable in India even for a non-resident.

The foreign-share capital gains rules below therefore bite mainly when you are resident in the year of sale, typically after you move back and your RNOR window has closed. For that resident seller, the structure is as follows.

On holding period, foreign company shares are unlisted from the Indian system's point of view, so they are long-term when held for more than 24 months and short-term at 24 months or less. The clock starts on the vesting or exercise date that set your cost, not the grant date. The 36-month category was abolished by the Finance (No. 2) Act, 2024, so there are now only two lines, 12 months and 24 months, and foreign shares fall on the 24-month line.

On rate, for transfers on or after July 23, 2024, long-term gains on these foreign shares are taxed at 12.5% without indexation under Section 112(1), plus 4% health and education cess and surcharge where applicable. Short-term gains, held 24 months or less, are simply added to total income and taxed at your slab rate, which for a higher earner is the 30% slab plus cess. There is no concessional short-term rate here; the 20% Section 111A rate is reserved for STT-paid Indian listed equity and does not reach foreign shares.

On cost basis, the bit people get wrong, your cost of acquisition is the FMV on the vesting or exercise date, the same value that was taxed, or that would have been taxed, as a perquisite. This holds even if the perquisite was never actually Indian-taxed because you were a non-resident at vesting. The cost basis is a feature of the share, not of where the perquisite was taxed. Use the vesting-date FMV converted to rupees, and your gain is only the post-vesting appreciation.

See that arithmetic in one case. Arjun returned to India and is Resident and Ordinarily Resident for FY 2025-26. He holds 200 shares of his former US employer, acquired on vesting on June 1, 2022, when FMV was Rs 6,000, so his cost basis is 200 times Rs 6,000, which is Rs 12,00,000. He sells all 200 on September 1, 2025 at Rs 11,000, for proceeds of Rs 22,00,000. June 2022 to September 2025 is more than 24 months, so the gain is long-term, and the sale is after July 23, 2024, so the rate is 12.5% without indexation. Proceeds Rs 22,00,000 minus cost Rs 12,00,000 gives a long-term gain of Rs 10,00,000, tax at 12.5% is Rs 1,25,000, plus 4% cess of Rs 5,000, so Rs 1,30,000 before any surcharge.

Now suppose Arjun's transition-year US filing left him paying the equivalent of Rs 90,000 of US tax on the same disposal. Under Section 90 and the India-US treaty he claims a foreign tax credit equal to the lower of the foreign tax paid (Rs 90,000) and the Indian tax on that doubly taxed income (Rs 1,30,000), so the credit is Rs 90,000, and his net Indian tax falls from Rs 1,30,000 to Rs 40,000. The cost-basis point is what makes this gentle: although his 2022 perquisite may never have been Indian-taxed, his cost is still the Rs 12,00,000 vesting-date FMV, so India taxes only the Rs 10,00,000 of post-vesting appreciation, not the full Rs 22,00,000. Compute the gain off a zero cost by mistake and you would be staring at Rs 2,75,000 of tax on Rs 22,00,000, more than double the real figure. In the common US case, where the US does not tax the gain because of non-resident-alien treatment, there is no foreign tax to credit and Arjun simply pays the Rs 1,30,000.

Schedule FA switches on only when you become an ordinary resident, with a Rs 20 lakh floor

A separate obligation, and one that ambushes returning NRIs, is foreign asset reporting. Schedule FA in the ITR must be filed only by individuals who are Resident and Ordinarily Resident for the year. NRIs and RNOR individuals are exempt entirely. So while you are a non-resident, none of this enters your Indian return: not your foreign brokerage account, not your vested RSUs, not your unvested grants, not the foreign bank account the proceeds land in.

The year your status flips to ROR, the obligation switches on for every foreign asset you hold, reported by ownership, not by whether it generated income. A dormant foreign brokerage account, vested-but-unsold RSUs, even unvested grants in many readings, all become reportable, alongside Schedule FSI for foreign-source income and Schedule TR for the related tax relief. The teeth come from the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, which penalises non-disclosure at Rs 10 lakh per year of default, with a flat 30% tax on undisclosed foreign income and prosecution for wilful evasion up to seven years.

There is one genuine softening worth knowing, because it changes the risk calculus for smaller holders. Since October 1, 2024, the Rs 10 lakh penalty does not apply where your foreign assets other than immovable property total under Rs 20 lakh. That helps someone with a small dormant overseas account. It does almost nothing for the typical reader of this guide, because a foreign brokerage account holding even a modest tranche of vested RSUs breaches Rs 20 lakh easily, so the full Rs 10 lakh-per-year exposure remains live for exactly the people this guide is written for. There is also a one-time disclosure window under discussion in the Finance Bill 2026 for those who slipped, but do not plan around an amnesty that may or may not pass; plan around the disclosure rule.

The practical point: the same residential-status test that flips your worldwide-income liability also flips your Schedule FA obligation, and both flip together the year you stop being RNOR. If you are moving back, map the year your RNOR window closes and have a complete foreign-asset inventory ready for that first ROR return, vested and unvested. The table mechanics are in our Schedule FA foreign asset reporting guide.

The foreign tax credit, and the timing relief that took the pressure off Form 67

Equity compensation is the classic double-tax trap, because the country where you work taxes the vesting income and India may tax it too once you are resident. The mechanism that stops the same slice being taxed twice is the foreign tax credit, under Section 90 read with the relevant treaty, or Section 91 where there is no treaty. The credit is broadly the lower of the foreign tax actually paid and the Indian tax on that same doubly taxed income. It offsets Indian tax on the overlapping slice; it is not a refund of foreign tax.

To claim it you file Form 67 online, governed by Rule 128, with the foreign payslip or Form 1042-S, the foreign return and proof of payment, because the credit has to be substantiated. The historic trap was timing: Form 67 once had to be in before the Section 139(1) due date or the credit was refused. That has eased on two fronts. Rule 128(9) was amended in 2024 to let you furnish Form 67 up to the deadline for a belated return under Section 139(4) or an updated return under Section 139(8A), not only the original due date. And a line of tribunal decisions, including the Indore bench, now treats Form 67 as directory rather than mandatory, holding that a treaty right to credit cannot be extinguished by a procedural slip. The honest reading: file Form 67 on time anyway, because relying on a tribunal to rescue a late filing is a worse plan than spending twenty minutes on the form, but a missed deadline is no longer the automatic disaster it once was.

One real difficulty remains, and it is structural. India runs an April-to-March tax year, the US a calendar year, the UK an April-to-April year on different dates. India lets you credit foreign tax only in the same year the corresponding income is offered to Indian tax, so when a vesting or sale falls in different tax years across the two countries, matching the foreign tax to the right Indian year is genuinely fiddly and not always intuitive. For a clean single-year case it is mechanical; for a straddling case, get it reviewed. The broader treaty mechanics, the Tax Residency Certificate and Form 10F are covered in our DTAA mechanics, TRC and Form 10F guide, and the overview in DTAA relief for NRIs.

India-US and India-UK, where the corridors quietly diverge

The two commonest corridors for our readers behave differently, and the differences shape RSU planning.

For the India-US corridor, the decisive practical fact on the capital gain is that US domestic law does not tax a non-resident alien on gains from selling US shares. So an Indian resident selling US RSU shares generally faces no US tax on the gain, India taxes it at 12.5% long-term, and there is little or no US tax to credit, meaning little double taxation on the sale side. The double-tax pressure on the US corridor sits at the vesting event, where the US taxes the perquisite as wages with withholding while you are a US worker. As long as you are non-resident in India for that US service, India does not tax the perquisite, so again there is nothing to credit. The FTC machinery becomes live mainly in the transition years when your residence is moving. Worth noting alongside this: US dividends on the held shares are withheld at the 25% treaty rate for Indian residents, a separate income stream from the perquisite and the gain.

For the India-UK corridor, the UK taxes RSU vesting as employment income, and for someone who worked in the UK during the grant-to-vest period the UK has the primary right to that employment income under the treaty's dependent-personal-services article. While you are non-resident in India for UK service, India does not tax the perquisite, so the relief question is about the UK taxing it, not India. On the gains side, the UK taxes disposals by UK residents, so a UK resident at sale faces UK capital gains tax and an India resident at sale faces Indian tax, with the treaty and the FTC sorting out any overlap in a transition year. The takeaway for both corridors is identical: while you are cleanly non-resident in India, the host country taxes the vesting and India does not, so the FTC matters most in the messy in-between years.

I will be direct about the uncertainty. Treaty articles are worded differently country by country, and the interaction of the dependent-personal-services article, the residual capital gains article and domestic sourcing is exactly the kind of question where reasonable professionals differ on the edges. The general framing above is sound, but a grant that straddled two countries and two tax years deserves a written opinion.

The map at a glance

Your situation	Whose shares	Perquisite at vest/exercise	Gain at sale
NRI, full grant-to-vest abroad	Foreign company	Not Indian-taxed (foreign-source)	Not Indian-taxed (foreign asset)
NRI, full grant-to-vest abroad	Indian company	Not Indian-taxed if service all abroad	Taxable in India (Indian asset)
NRI, grant-to-vest straddled India	Either	Indian-source fraction taxed (apportion)	Indian-company gain taxable; foreign-company gain not
NRI, grant earned for Indian service	Either	Fully Indian-taxed (source is India)	Indian-company gain taxable; foreign-company gain not
ROR after return	Foreign company	Past vesting may already be settled	LTCG 12.5% after 24 months; FTC via Form 67
RNOR after return	Foreign company	Foreign income largely sheltered	Often sheltered; time the sale, take advice

Edge cases worth flagging

A few situations sit outside the general rules.

On dividends before sale, foreign dividends are a separate stream from the perquisite and the gain. For a resident they are taxable in India at slab rates with a credit for foreign withholding; for an NRI they are foreign-source and out of the Indian net. The US withholds 25% on dividends to Indian residents under the treaty.

On cashless or sell-to-cover at vesting, many US plans automatically sell a slice of the vesting shares to cover withholding. That automatic sale is itself a disposal, usually at or near the vesting FMV, so the capital gain on the sold-to-cover shares is typically near zero, and the shares you keep retain the full vesting-date cost basis.

On ESOPs of an eligible Indian startup under Section 80-IAC, employees of certain DPIIT-recognised startups can defer the perquisite tax at exercise. It is a narrow, resident-focused relief, but check it if your employer qualifies.

On selling in an RNOR year, RNOR shelters foreign income, so a foreign-share sale in an RNOR year is often outside the Indian net, though it turns on whether the income is received in India and on the precise RNOR sub-rules. A genuine planning window worth timing deliberately, with advice.

On currency conversion, both the cost basis and the sale proceeds must be converted to rupees using the prescribed telegraphic-transfer reference rates, not a spot rate found online, and exchange-rate movement alone can create a rupee gain even where the dollar gain is small.

The honest read

For an NRI working abroad whose RSUs or ESOPs were earned entirely for foreign service and issued by a foreign company, the Indian tax story is far quieter than most accountants instinctively make it. While you are a non-resident, that vesting perquisite is not Indian-taxable, the gain on selling those foreign shares is not Indian-taxable, and you have no Schedule FA obligation. The host country does the taxing at vesting, and that is where your attention and your FTC planning belong. If anyone tells you to report that as Indian income, they are working from the wrong rule.

But do not over-learn that comfort, because two situations flip it hard, and they are where the money is. The first is a grant earned for Indian service, whether through a straddling grant-to-vest period that forces a pro-rata apportionment and an Indian return for the Indian-source slice, or an Indian-company grant whose shares stay Indian-source on sale no matter where you live. The November 2025 ITAT ruling is the warning shot: residence at exercise saves no one when the work was done in India. The second is the year you become Resident and Ordinarily Resident, when worldwide income, the 12.5% long-term rate on foreign shares held over 24 months, and the full Schedule FA regime with its Rs 10 lakh-per-year penalties all switch on together.

So the recommendation for the common case is concrete. If your grant is foreign-company and was earned cleanly abroad, claim that non-resident position with confidence and put your energy into the host-country filing, not an unnecessary Indian one. If any part of your grant traces to Indian service, or your shares are in an Indian company, assume India has a claim and get the apportionment or the Indian-source gain computed properly, with a written opinion on anything large. And whatever your situation, never get the cost basis wrong: it is the vesting-date FMV, so you are taxed only on appreciation after vesting, regardless of whether the perquisite was ever Indian-taxed. Where the position is genuinely debated, on apportionment mechanics, on straddling-year FTC timing, on the finer treaty interactions, treat this guide as a map, not a substitute for advice on your specific grant.

Related guides

• NRI residency and RNOR rules
• ITR filing for NRIs, AY 2026-27
• Capital gains tax for NRIs on shares and mutual funds
• DTAA relief for NRIs
• DTAA mechanics, TRC and Form 10F
• TDS for NRIs and how to get refunds
• Schedule FA foreign asset reporting
• Tax on NRO interest
• NRE, NRO and FCNR accounts explained
• Building an India corpus as an NRI
• Repatriating investment proceeds
• Taxation guides hub
• Banking guides hub
• Investments guides hub

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Disclaimer: This guide is general information for Indian expats, not personal tax advice, and the cross-border tax positions discussed here are complex and in several places genuinely debated. Residential status, the source and apportionment of an RSU perquisite across countries, the treatment of Indian-company versus foreign-company shares, the timing of foreign tax credits across mismatched tax years, and treaty interactions all turn on facts specific to you and on rules that can change. Rates and rules described are as understood for AY 2026-27 (FY 2025-26), with capital gains rates reflecting the Finance (No. 2) Act, 2024 changes effective July 23, 2024. Verify current provisions and obtain a written opinion from a qualified chartered accountant or cross-border tax adviser before acting, particularly for large grants, straddling vesting periods, Indian-company grants, or the year you change residential status.