How to File ITR with RSU/ESOP Income in India
TL;DR: RSU/ESOP income requires ITR-2 (not ITR-1). You report salary perquisite on vesting + capital gains on sale. TaxZen auto-computes RSU capital gains for free — no CA needed.
What Are RSUs and ESOPs?
RSU (Restricted Stock Unit) — Your employer grants you company shares that vest over time. Common at Google, Microsoft, Amazon, Flipkart, Atlassian, Uber, and other tech companies.
ESOP (Employee Stock Option Plan) — Your employer gives you the option to buy company shares at a discounted price (exercise price).
How RSU/ESOP Income is Taxed in India
RSU/ESOP income is taxed at two points:
- On vesting/exercise (as salary perquisite): The fair market value (FMV) on the vesting date minus any amount you paid is taxed as salary income. This is already included in your Form 16 by your employer.
- On sale (as capital gains): When you sell the shares, the difference between sale price and FMV on vesting date is capital gains. This is NOT in Form 16 — you must compute and report it yourself.
STCG vs LTCG Classification
| Share Type | Holding Period for LTCG | STCG Rate | LTCG Rate |
|---|---|---|---|
| Listed Indian shares | > 12 months | 20% (Sec 111A) | 12.5% above ₹1.25L (Sec 112A) |
| Unlisted / foreign shares (Google, Amazon, etc.) | > 24 months | At slab rate | 12.5% (Sec 112) |
Step-by-Step: How to File
- Collect your data: Vesting dates, number of shares vested, FMV on each vesting date, sale date, sale price, and any brokerage fees.
- Go to taxzen.co/file and upload your Form 16 (this captures the salary perquisite part).
- Add RSU/ESOP sales in the capital gains section — TaxZen computes STCG vs LTCG, handles forex conversion for foreign shares, and fills Schedule CG automatically.
- Compare regimes — TaxZen shows whether old or new regime saves more with your RSU income included.
- Download ITR-2 JSON and upload to the income tax portal (incometax.gov.in).
Common Mistakes to Avoid
- ❌ Filing ITR-1 with RSU income (ITR-1 doesn't support capital gains — you need ITR-2)
- ❌ Using purchase price as cost basis instead of FMV on vesting date
- ❌ Forgetting forex conversion for foreign company shares (USD → INR on both vesting and sale dates)
- ❌ Double-counting — the perquisite is already in Form 16 salary, don't add it again as capital gains
- ❌ Treating all RSU gains as salary — only the vesting value is salary, the sale gain is capital gains
Why Use TaxZen for RSU/ESOP Filing?
- ✅ Auto-computes capital gains from vesting and sale details
- ✅ Handles FMV calculation and forex conversion
- ✅ Classifies STCG vs LTCG correctly based on holding period
- ✅ Generates Schedule CG for ITR-2 automatically
- ✅ Compares old vs new regime with RSU income included
- ✅ Completely free — no CA needed
- ✅ Privacy-first — all computation in your browser, no data uploaded
Ready to file? Start filing your ITR with RSU/ESOP income at TaxZen — free →