RSUs and ESPP stock are the most common reason an Indian resident ends up with a foreign-asset disclosure — and the most commonly mis-reported. Here is how each vest, purchase and sell-to-cover actually maps onto Schedule FA.
Every vest is a separate lot
RSUs don't arrive all at once — they vest in tranches over months or years. In Schedule FA each vesting event is one acquisition, reported on its own line in table A3. Do not collapse a year of vests into a single blended row: you report per lot, each with its own acquisition date, quantity and cost.
Why lots matter beyond tidiness: when you later sell some shares, FIFO (first-in, first-out) decides which vest you sold, which fixes each lot's holding window and therefore its peak value. The full mechanics are in the complete Schedule FA guide.
Cost basis is the fair market value on the vest date
The initial (acquisition) value of an RSU lot is the fair market value of the shares on the vest date — not zero, and not the grant-date price. That FMV is also the perquisite value taxed as salary on your Indian return, so the two line up.
| How you acquired the shares | Cost basis per share |
|---|---|
| RSU vest | Fair market value on the vest date |
| ESPP purchase | FMV on the purchase date — not the discounted price you paid |
| ESOP exercise | FMV on the exercise date |
| Dividend reinvestment | The reinvestment price (and the dividend is also reported as income) |
Sell-to-cover: netted against the vest, not a separate sale
When RSUs vest, your broker usually sells a slice of the just-vested shares the same day to fund the tax withholding — “sell-to-cover.” The right way to treat it is against that same vest, not as an ordinary market sale of your older holdings:
- Initial value is the gross units that vested — the full vest before the withholding sale. That is the same figure taxed as the Form-16 perquisite, so the two line up.
- Peak value is measured on the net units you kept, over the window starting at the vest date. The withheld shares are sold the same day they vest, so they are never held on any single day — they add no peak of their own.
- Closing value — the value on 31 December — reflects the net units you actually kept (gross vest minus the shares sold to cover).
- The withholding-sale proceeds are excluded by default: those shares were never held as an investment, and their value is salary already taxed via Form 16. Treating the withholding sale as a reportable A3 disposal is a stricter interpretation you can opt into — it is a policy choice, not the default.
A worked example — a single RSU vest of 22 units at a fair market value of $100 on the vest date (SBI TT ₹83), of which 8 are sold to cover tax, leaving 14 kept. Say the price high over the rest of the year is $120 (rate ₹84 that day) and the 31 December price is $110 (rate ₹85):
| Schedule FA figure | Units used | Computation | Value |
|---|---|---|---|
| Initial value | 22 (gross) | 22 × $100 × ₹83 | ₹1,82,600 |
| Peak value | 14 (net kept) | 14 × $120 × ₹84 | ₹1,41,120 |
| Closing value (31 Dec) | 14 (net kept) | 14 × $110 × ₹85 | ₹1,30,900 |
| Sale proceeds | 8 (sold to cover) | excluded by default | — |
You still report shares you already sold
The test is “held at any time during the calendar year,” not “held on 31 December.” A vest you received and fully sold in the same year is reportable: its 31 December closing value is zero, but initial value, peak value and proceeds all required. Forgetting these fully-sold lots is one of the most common omissions.
Dividends on your vested stock
Dividends credited during the year are reported gross, converted at the SBI TT rate on the credit date. If dividends are reinvested, each reinvestment also creates a new lot at the reinvestment price.
Common RSU / ESPP mistakes
- Reporting one blended line instead of one row per vest lot.
- Using the grant price or $0 as cost basis instead of vest-date FMV.
- Using the discounted ESPP price instead of purchase-date FMV.
- Omitting vests that were sold before 31 December.
- Converting every figure at the 31 December rate instead of each figure's own SBI TT date.
- Reporting the December holding value as the peak instead of the intra-year high.
Upload your foreign bank and brokerage statements. FinDrishti reconstructs every lot, peak, and closing value — showing the source and math on every number — and builds your Schedule FA. The first three rows are free.