What is the capital gains tax rate on RSU in India?

RSU gains held for 24 months or more from the vest date are Long-Term Capital Gains (LTCG) taxed at 12.5% without indexation under Section 112A (Finance Act 2024). Gains held for less than 24 months are Short-Term Capital Gains (STCG) taxed at the applicable slab rate — typically 30% for most RSU holders.

What is the cost of acquisition for RSU capital gains?

The cost of acquisition for RSU capital gains in India is the Fair Market Value (FMV) on the vest date, converted to INR using the SBI TT Buy rate on the last working day of the month preceding the vesting month (per Rule 115 of the Income Tax Rules 1962). The FMV is already treated as perquisite income under Section 17(2) and taxed as salary by the employer.

How to Calculate Capital Gains on RSU in India (2025-26)

By GainSutra · Updated May 2026 · 8 min read

Capital gains on RSU in India is calculated as the difference between the sale price and the cost of acquisition — both converted to INR at the SBI TT Buy rate applicable under Rule 115 of the Income Tax Rules 1962. The rate to use is not today's rate, not the transaction date rate. It is the SBI TT Buy rate on the last working day of the month immediately preceding the transaction month.

This distinction matters. A 50 paise error in the applicable rate on a large RSU position shifts the declared gain by thousands of rupees. Under Section 270A of the Income Tax Act, incorrect reporting of income qualifies as misreporting — attracting a penalty of 200% of the tax on the incorrectly reported amount.

Key rule: Use the SBI TT Buy rate on the last working day of the month before the vesting or sale — not the date of the transaction. This is Rule 115 of the Income Tax Rules 1962.

Step 1 — Determine the Cost of Acquisition

When RSUs vest, the Fair Market Value (FMV) on the vesting date is treated as perquisite income under Section 17(2) of the Income Tax Act. Your employer deducts TDS on this amount as part of salary. For capital gains on a subsequent sale, the cost of acquisition is this same FMV — converted to INR at the Rule 115 SBI TT Buy rate for the preceding month-end.

For example: if RSUs vest in March 2025, the applicable SBI TT Buy rate is the rate on February 28, 2025 — the last working day of February.

Step 2 — Determine the Holding Period

The holding period for LTCG eligibility starts from the date of acquisition — the vest date, not the grant date. For listed foreign equity (which RSUs are), the threshold is 24 months.

Holding period from vest date	Tax treatment	Rate (FY 2025-26)
Less than 24 months	Short-Term Capital Gain (STCG)	Applicable slab rate
24 months or more	Long-Term Capital Gain (LTCG)	12.5% without indexation (S.112A)

The Finance Act 2024 changed the LTCG rate from 20% (with indexation) to 12.5% (without indexation) effective from July 23, 2024. For FY 2024-25 and 2025-26 onwards, 12.5% applies to all listed securities including foreign RSUs.

Step 3 — Calculate the Capital Gain

The formula is straightforward once you have the correct rates:

    Capital Gain (INR) = (Sale Price × Sale Month SBI TT Rate) − (Vest Price × Vest Month SBI TT Rate)

    Tax Payable = Capital Gain × Tax Rate + 4% Health and Education Cess

    Surcharge applies if total income exceeds Rs. 50 lakhs — rates vary by income slab.

Step 4 — Repeat for Every Lot Independently

Each vest event is a separate lot with its own cost basis, holding period and applicable rate. A single broker statement may contain 20-30 vesting events across multiple financial years. Each must be computed independently. Aggregating lots or using an average rate introduces errors that the assessing officer can identify easily.

Step 5 — Report in ITR-2 Schedule CG

Capital gains from RSU sales go in Schedule CG (Capital Gains) of ITR-2 or ITR-3. LTCG under Section 112A goes in the "Long-term capital gains on sale of equity shares / units" section. STCG goes in the "Short-term capital gains where tax rate is applicable at normal rates" section since foreign listed equity STCG is not eligible for the 15% concessional rate under Section 111A (that applies only to domestic listed equity).

Do this automatically with GainSutra

Upload your broker PDF. GainSutra extracts every lot, applies the correct Rule 115 SBI TT rate, classifies STCG vs LTCG, and generates the Schedule CG data ready for your return.

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Frequently Asked Questions

Is there surcharge on LTCG from RSU?

Yes. If total income including LTCG exceeds Rs. 50 lakhs, surcharge applies. The surcharge on LTCG under Section 112A is capped at 15% regardless of the income slab — unlike other surcharges which go up to 37%. Always verify with your CA for your specific income level.

Is the grant date or vest date used for holding period?

The vest date. RSUs are not property until they vest. The holding period for capital gains starts from the date of acquisition, which is the date of vesting — not the date the RSU grant was made. Using the grant date is one of the most common errors in RSU tax filing.

What if RSUs were sold in the same financial year they vested?

If the sale occurs within 24 months of the vest date, it is STCG regardless of the financial year. The calendar dates of vesting and sale determine the classification — not which ITR they fall in.