If you received an RSU grant while working in the US, Singapore, Germany, or another country, and some of the vesting period happened after you moved to India, neither country gets to tax the whole thing on its own terms.
The income from that vesting is split between the two tax authorities based on where you actually worked during the vesting period, and India taxes only the India-attributable slice once you're a resident here. You then use the foreign tax credit (FTC) mechanism, via Form 67, to avoid paying full tax twice on the portion that both countries touch.
Table of contents
- Why vesting-country residence alone doesn't decide the tax
- How India taxes the India-attributable portion
- Claiming relief on the foreign-taxed portion: Form 67 and the FTC
- Documentation to support the apportionment claim
- If you're still RNOR when the RSUs vest
Why vesting-country residence alone doesn't decide the tax
An RSU grant usually vests over several years. If you were working in the US (or Singapore, or Germany) for part of that vesting period and then relocated to India and kept working there, right up to the day the RSUs vest, the employment income the vesting represents was earned in both places, not just wherever you happened to be sitting on vest day.
Both the source country and India generally apportion that income based on how many working days during the vesting period you spent in each country:
- United States. India and the US split RSU income that straddles residency in both countries based on the number of workdays in each country during the vesting period.
- Germany. The German-source portion of an RSU's vesting income covers the workdays spent in Germany during the full vesting period, from grant to vest. If you're resident in India by the time the RSUs actually vest, Germany only taxes the portion attributable to German workdays.
- Canada. The CRA calculates the Canadian-source portion of apportioned RSU income based on the ratio of Canadian workdays during the full vesting period to total workdays in that period.
- Australia. The apportionment calculation covers the entire vesting period from grant, not just the period after you moved back to India, and the Australian-source share is your Australian workdays divided by total workdays in that period.
Singapore works differently. Singapore doesn't apply this same workday split. Instead, IRAS applies a 'deemed exercise' rule at tax clearance: any RSUs that haven't vested yet when you leave your Singapore employment are treated as if they vested (or were exercised) on your departure date, and Singapore assesses tax on the notional gain immediately, rather than waiting for the actual vest date.
An employer can apply for the 'Tracking Option' with IRAS as an alternative, which defers the actual tax until the RSUs genuinely vest. If your grant involves Singapore, check with your employer which of these two applied to you, since it changes when and on what value Singapore taxes the grant, separately from any India-side apportionment.
In every one of these workday-based cases, the underlying idea is the same: the employment income a vesting event represents is sourced to wherever the work that earned it actually happened, tracked day by day across the full stretch from grant to vest, not assigned wholesale to whichever country you're resident in on the vesting date.
How India taxes the India-attributable portion
Once you're a tax resident of India (Resident and Ordinarily Resident, or ROR; RNOR status changes this, covered below), the India-attributable share of the RSU's value is taxed the same way any RSU vesting is taxed in India:
- The fair market value (FMV) of the vested shares is treated as a perquisite, which forms part of your salary income, under Section 17(2) of the Income-tax Act.
- That value is taxed according to your applicable income tax slab, just like regular salary, plus applicable surcharge and Health & Education Cess.
- Your employer usually deducts TDS on this under Section 192 of the Income-tax Act, either by selling a portion of the vesting shares (sell-to-cover) or by deducting it from your other salary.
- The FMV in USD (or another foreign currency) is converted to INR using the SBI TT Buying Rate (TTBR) applicable on the vesting date, generally the vesting date itself, since RSU vesting almost always triggers immediate TDS withholding.
What's different in a multi-country grant is only the base figure India applies this to: it's the apportioned India-source value, not the full vesting-date FMV of the shares. The mechanics of how that slice is taxed (perquisite, slab rate, Section 192 TDS, TTBR conversion) don't change.
Who actually withholds TDS on which slice, and whether your Indian employer's payroll applies Section 192 to the full FMV or only the India-attributable portion, depends on how your employer's cross-border payroll is set up. Check your Form 16 and payslips around the vesting date to see exactly what was withheld, and reconcile that against the apportioned figure before you file.
Claiming relief on the foreign-taxed portion: Form 67 and the FTC
The portion of the same vesting that's attributable to your workdays abroad is typically taxed there too (the US withholds on US-source RSU income at vesting the same way it does for any employee; Germany applies wage tax the same way). Once you're an Indian tax resident, that foreign-source income is also part of your worldwide income and taxable in India, so without relief, that slice would genuinely be taxed twice. That's where the Foreign Tax Credit comes in.
- Form 67 is the mandatory statement a resident Indian taxpayer files to claim credit for tax paid in a country outside India, whether that tax was paid by deduction (withholding) or paid directly.
- The credit relief is given under Sections 90 and 91 of the Income-tax Act, read with Rule 128 (the Ordinary Credit Method), and is adjusted only against the Indian tax liability on that specific foreign-source income, not your total tax bill.
- The credit is capped at the lower of:
- (A) the foreign tax actually paid, or
- (B) the Indian tax payable on that same income. If the foreign tax paid is higher than the Indian tax on it, the excess cannot be carried forward.
- Form 67 must be filed electronically on the Income Tax e-filing portal before you file your Income Tax Return. Practically, it needs to be filed first because the ITR itself asks you to enter the credit details, and if Form 67 isn't already on record, the tax department's automated processing can simply reject the credit claim.
- The figures in Form 67 must match exactly with Schedule FSI (Foreign Source Income) and Schedule TR (Tax Relief) in your ITR; mismatches between the two are the most common cause of processing errors and can trigger defective-return notices or scrutiny.
- Foreign tax amounts are converted to INR using the SBI TTBR from the last day of the month preceding the month the tax was paid or deducted. Unlike an RSU vesting perquisite, this is foreign (not Indian) tax being converted, so the general preceding-month rule applies here without any shift to the payment date.
For a full walkthrough of Form 67 mechanics, see our Form 67 guide.
Documentation to support the apportionment claim
The single most important record is a day-by-day workday log covering the full vesting period, from the grant date all the way through to the vesting date, not just from the date you moved. This is what lets you (and, if it's ever questioned, the assessing officer) recompute the workday ratio behind your apportionment figure.
For the Form 67 / FTC side specifically, you'll also need:
- A certificate from the foreign tax authority, or a Tax Deducted at Source (TDS) certificate or statement from your employer/withholder, stating the nature of the income and the exact tax paid or deducted.
- If you genuinely can't obtain an official certificate, Rule 128 allows a self-signed statement instead, but it must be accompanied by proof of payment: an acknowledgement of online tax payment, a bank counterfoil, or a challan.
- If any of these documents are in a language other than English, a certified English translation is legally required to avoid rejection.
- All supporting documents should be scanned and uploaded as PDFs, and the form itself is submitted using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC, via Aadhaar OTP or net banking).
There isn't a single, formally exhaustive list of employer-side documents (grant agreement, assignment or secondment letter, country-transfer notification) that an assessing officer is guaranteed to ask for in support of the apportionment calculation itself, as opposed to the FTC claim.
In practice, keeping your grant agreement (for the grant date), any relocation or transfer letter (for the date your work location changed), and your travel/immigration records (to corroborate the workday log) alongside the log itself is a reasonable precaution.
If you're still RNOR when the RSUs vest
Everything above assumes you're already a full Resident and Ordinarily Resident (ROR) of India by the time the RSUs vest. If you've only recently moved back and still qualify as Resident but Not Ordinarily Resident (RNOR), the outcome changes: during the RNOR window, your foreign-source income isn't taxed by India at all.
Applied to a multi-country RSU vesting, that means only the India-attributable (workday-apportioned) slice is taxable in India; the foreign-attributable slice, though still taxed abroad, is simply not brought into your Indian return, and there's no FTC claim needed for it since India isn't taxing it in the first place.
Example
Suppose you're a product manager who joined your employer's US office in April 2023, roughly three years before this vesting, which is short of the nine-out-of-ten-year NRI history needed to qualify for RNOR when you move back.
An RSU tranche was granted on 1 April 2024 and vests on 1 April 2026, a 24-month vesting period.
You worked from the US office from the grant date through 30 September 2025 (18 months), then relocated and worked for the group's India entity from 1 October 2025 through the vest date (6 months).
By the time this tranche vests, you're already a Resident and Ordinarily Resident (ROR) of India, not RNOR. Assume a constant rate of 21 working days per month throughout (a simplifying assumption for the example), 100 shares vest, the FMV is $400 per share, and the applicable SBI TTBR is ₹86/USD (also illustrative).
| Period | Country worked from | Months | Workdays (at 21/month) | Share of total workdays | RSU value attributed |
|---|---|---|---|---|---|
| 1 Apr 2024 – 30 Sep 2025 | United States | 18 | 378 | 75% | ₹25,80,000 |
| 1 Oct 2025 – 1 Apr 2026 | India | 6 | 126 | 25% | ₹8,60,000 |
| Total | 24 | 504 | 100% | ₹34,40,000 |
The result: of the ₹34,40,000 total perquisite value, ₹25,80,000 (75%) is treated as US-source income and ₹8,60,000 (25%) as India-source income.
The US taxes its ₹25,80,000 slice as US-source wage income at vesting, the same way it would for any employee, regardless of where you now live.
Because you're ROR, India taxes the full ₹34,40,000 as salary income under Section 17(2) at your applicable slab rate (plus surcharge and cess), with TDS deducted under Section 192 by whichever entity processes your Indian payroll.
To avoid paying full tax twice on the US-source ₹25,80,000 slice, you file Form 67 before your ITR, claiming a credit for the US tax already paid on that portion, capped at the lower of the US tax paid or the Indian tax payable on that same ₹25,80,000.
If you had instead still been RNOR at vesting, only the ₹8,60,000 India-source slice would have been taxable in India at all, and no FTC claim would have been needed on the US-source portion.
