What is sell-to-cover for RSUs?

Sell-to-cover is when your employer sells a portion of vested RSU shares at vesting to pay the Indian perquisite tax (and sometimes US withholding). The In-Hand Equity Calculator estimates how many shares may be sold at vest FMV to cover perquisite tax — actual broker withholding may differ.

RSU & ESOP Tax Calculator India (FY 2026-27) | In-Hand™ Equity Calculator

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In Hand Equity Money · Tap to recalculate

Tax: ₹0 Effective rate: 0% You keep: 0% of vest value

RSU LTCG eligibility · timeline

Days already vested Days left to LTCG (slab rate if sold now) LTCG eligible (flat 12.5%)

Total perquisite value (all tranches, at vesting) ₹0

↳ This appears in your Form 16 under Section 17(2)

Short-term capital gains (sold, held ≤ 24 months) ₹0

Long-term capital gains (sold, held > 24 months) ₹0

Tax on long-term gains (flat 12.5% + surcharge + cess) ₹0

Check "I've sold (or plan to sell) these shares" above to see capital gains

Tax on perquisite + short-term gains (slab rate) ₹0

Scope & assumptions

Tax treatment US-listed shares count as unlisted in India — 24-month hold for LTCG, flat 12.5%, no indexation or exemption.
Surcharge LTCG surcharge is checked separately from slab-income marginal relief (a documented simplification).
Exchange rate Auto-filled from ECB market data. Use the SBI/RBI rate for the relevant date when filing.
Sell-to-cover Estimated as shares sold at vest FMV to pay tax — not your broker's actual withholding.

See FAQ · Not tax advice.

RSU & ESOP Tax — Quick Answers

Updated for FY 2026-27

For Indian employees holding Restricted Stock Units (RSU) or Employee Stock Option Plan (ESOP) grants from a US-listed or US-based company — Google, Microsoft, Amazon, Meta, or a US startup. Calculates perquisite tax at each vesting date, sell-to-cover estimates, and long-term capital gains (LTCG) / short-term capital gains (STCG) on foreign shares.

Example: Google RSU tax calculation (new regime, FY 2026-27)

Illustrative single-vest scenario — enter your own numbers in the calculator above.

Inputs
Other annual taxable income (fixed salary): ₹9,50,000
100 Restricted Stock Units (RSU) vest
Fair market value (FMV): $180 per share
USD → INR: 94.5

Results
Perquisite value (Sec 17(2)): ₹17,01,000
Tax on perquisite (stacked on salary): ₹3,90,312
After-tax value retained: ₹13,10,688
Effective tax rate on vest: ~22.9% of gross perquisite

What is an RSU?

A Restricted Stock Unit (RSU) is a promise of company shares that vest on a schedule. On each vesting date, shares (or their cash equivalent) become yours at the fair market value (FMV) — that FMV is taxable salary income in India under Section 17(2), and typically appears on your Form 16.

RSU vs ESOP vs ESPP

RSU — taxed at vest on full FMV. ESOP (Employee Stock Option Plan) — you exercise options; perquisite is FMV minus exercise price. ESPP (Employee Stock Purchase Plan) — discount at purchase can create perquisite; this calculator focuses on RSU and ESOP grants from US companies. Capital gains at sale follow the same 24-month LTCG rule for foreign shares.

How are RSUs taxed in India? ▼

Two tax events: (1) Perquisite at vesting — FMV × shares is salary income (Section 17(2)), taxed at slab rate with surcharge and cess, whether or not you sell. (2) Capital gains at sale — gain since vest FMV; STCG if sold within 24 months, LTCG at 12.5% if held longer.

Are US company RSUs listed or unlisted shares in India? ▼

Unlisted under Indian law — Google, Meta, Microsoft, and Amazon are US-listed but not on an Indian exchange. The LTCG holding period is 24 months, not 12. No ₹1.25L LTCG exemption applies.

When does LTCG apply to RSUs? ▼

After 24 months from the vesting date. Use the RSU LTCG eligibility timeline in the results panel to see the exact date per tranche. Selling before that date triggers STCG at your slab rate.

What is sell-to-cover? ▼

Your employer may sell some vested shares at vest to pay perquisite tax (and US withholding). Our calculator estimates shares sold at vest FMV to cover Indian perquisite tax — not your broker's exact withholding.

Are RSUs shown in Form 16? ▼

Yes — perquisite value is included in salary under Section 17(2). Your employer deducts TDS on vest through payroll.

How do Google and Meta RSUs get taxed in India? ▼

Same rules as any US company: perquisite at each vest (USD FMV × exchange rate), stacked on your salary; capital gains when you sell. Enter your fixed taxable income plus each tranche's vest date and FMV in the In-Hand™ Equity Calculator.

What exchange rate should I use? ▼

This page auto-fills an approximate ECB market rate for the vest date. For filing, use the RBI/SBI reference rate for that date per Rule 115.

RSU LTCG eligibility · timeline

Vest & tax by financial year

Sell now vs wait

RSU & ESOP Tax — Quick Answers

Example: Google RSU tax calculation (new regime, FY 2026-27)

What is an RSU?

RSU vs ESOP vs ESPP

RSU LTCG eligibility · timeline

Vest & tax by financial year

Sell now vs wait

RSU & ESOP Tax — Quick Answers

Example: Google RSU tax calculation (new regime, FY 2026-27)

What is an RSU?

RSU vs ESOP vs ESPP

Other Taxable Income