RSU tax related advise needed

This query is : Resolved

a k (Querist)
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25 July 2022 RSU is vested and company deducted 30% of total RSU gain amount & deducted no of shares ( shares to cover by selling few shares for tax) and reported the same in income tax But I have not sold remained RSU which are left. E.g. if I received 100 vested shares and 30 shares sold to cover for tax for 30% then remaining 70 shares I have not sold before 31 mar 2022. Now after 2 years if I sell reminaing 70 shares then it will come under long term capital gain 20% as company is listed in NYSE america. So as I have not sold my shares before 31st march but my company treated as 30% by considering SG so can I get back this money and then inform when I sell it ? how does it work if RSU not sold by employee for which 30% tax is deducted by considering SG but if employee sells after 2 years then it is loss right. How to take care of this ?

Adv. Ravish Bhatt, ADIT, CIOT

Adv. Ravish Bhatt, ADIT, CIOT (Expert)
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03 August 2022 Your Employer, possibly an Indian company being a subsidiary of a US co. will treat RSU as perquisite in India at the time of vesting of the same. Valuation of shares will be product of number of shares vested and fair market value, which will be converted into INR and will be treated as income in form of perquisites. So initial deduction/ withholding of shares is to cover tax liability for perquisites.

Now when you sell remaining shares after two years, you need to pay capital gain tax here if value of stocks vested has increased by now. This capital gain tax has got nothing to do with earlier withholding of 30 shares by your employer.

Please take a professional opinion of a tax lawyer or a CA showing all your documents however.

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