The three taxable events, handled correctly
- When shares vest or are exercised — the perquisite value is taxed as salary in the year of vesting/exercise and usually already appears in your Form 16 (Form 130 from FY 2026-27). What matters is confirming it was captured correctly and at the right value.
- Foreign dividends — dividends on your foreign shares are taxable in India in your hands. Where the foreign country has already withheld tax (for example, US withholding on dividends), relief is available under the applicable Double Taxation Avoidance Agreement, claimed through Form 67 as a foreign tax credit — so you are not taxed twice.
- Capital gains on sale — when you sell the foreign shares, the gain is taxable in India. The holding-period and rate treatment for foreign/unlisted shares differs from Indian listed shares, and the cost, sale value, and gains must be converted and computed correctly using the prescribed exchange-rate rules.
Schedule FA — the disclosure you cannot skip
As a resident holding foreign assets, you are required to disclose them in Schedule FA of your return — the foreign shares, the holdings, and the relevant accounts — even where there is no income or you have already paid tax. This disclosure is independent of the income tax itself, and non-disclosure of foreign assets carries significant penalties under the law. Getting Schedule FA complete and correct is the single most important part of an MNC employee’s return, and it is handled here precisely.
Who this is for
Resident employees of multinational companies and Indian subsidiaries; professionals holding RSUs, ESOPs, or ESPP shares in a US or other foreign parent; and residents who have purchased foreign equity directly. If you are a non-resident or NRI, the treatment is different — see our NRI Taxation page instead.
What to send
Your Form 16 (Form 130 from FY 2026-27), your broker/equity-platform statements (vesting, dividend, and sale reports — Etrade, Morgan Stanley, Fidelity, etc.), and details of foreign tax withheld. The foreign-income computation and Schedule FA are prepared from these for your review before filing.