# ESOP & RSU Tax Calculator > Both taxes on Indian ESOPs and RSUs: perquisite at exercise and capital gains at sale, listed or unlisted, with the start-up deferral and foreign-parent case. Source: https://www.revquix.com/tools/esop-tax-calculator Cost: free, no signup --- Equity is taxed twice, at two different times, under two different heads. This computes both - including the start-up deferral and the foreign-parent trap. Calculated for FY 2026-27 (Tax Year 2026-27) under the Income-tax Act, 2025. ## At a glance - Takes: Shares, exercise price, fair market value and your sale price - Returns: Perquisite tax at exercise and capital gains at sale, separately - Basis: Holding-period rules by listing status, versioned by tax year - Privacy: Runs in your browser - no figure is sent anywhere ## Two taxable events, two heads of income The first event is exercise, or vesting for an RSU. The difference between the fair market value and what you paid is a perquisite - it is salary income, and it is taxed at your marginal slab rate whether or not you sell a single share. For an RSU there is no exercise price, so the entire fair market value at vest is perquisite. The second event is sale. The gain is the sale price less the fair market value at exercise, taxed as capital gains. The fair market value is the hinge between the two events: it is the ceiling of the perquisite and the cost basis of the gain. Using the exercise price as the basis instead taxes the same money twice, and it is the most common error in hand-rolled ESOP arithmetic. ## Listing status decides the holding period and the rate Listed Indian shares on which STT has been paid turn long-term after twelve months, with a concessional long-term rate above an annual exemption and a flat concessional rate on short-term gains. Unlisted shares need twenty-four months, and short-term gains are taxed at your slab rate rather than at a concessional one. From FY 2026-27 these rules sit in sections 196, 197 and 198 of the Income-tax Act, 2025 (formerly 111A, 112 and 112A), at unchanged rates. - Listed and STT-paid: twelve-month threshold, annual long-term exemption, flat short-term rate - Unlisted: twenty-four-month threshold, no annual exemption, short-term at your slab rate - Foreign-parent shares count as unlisted for Indian tax, whatever exchange they trade on - Every rate and threshold is versioned - the regime changed materially in July 2024 ## The two cases people get wrong The first is the foreign parent. An employee holding RSUs in a NASDAQ-listed parent reasonably assumes the listed rules apply. They do not: foreign shares are unlisted for Indian capital-gains purposes, so the threshold is twenty-four months and short-term gains attract slab rates. It also brings remittance limits and a Schedule FA reporting obligation that exists whether or not you sold anything. The second is the eligible start-up deferral. Where your employer is a DPIIT-recognised start-up - Section 140 (formerly 80-IAC) - the perquisite tax is not payable at exercise but at the earliest of 60 months from the end of the tax year, the sale of the shares, or your leaving the company. We show the deferral and its trigger rather than quietly taxing at exercise. ## What it will not do It will not value your unlisted company's shares. Fair market value for an unlisted company requires a Category-I merchant-banker valuation as of the exercise date, and inventing one is the single thing that would make an ESOP calculator dangerous. We take it as an input and say why. It also does not compute FEMA or Liberalised Remittance Scheme limits, does not fill in Schedule FA, and does not calculate foreign tax credit under a treaty. Those are surfaced as warnings for you to take to a chartered accountant, not as numbers dressed up as answers. ## Questions people ask ### When is an ESOP taxed - at exercise or at sale? Both. At exercise the gap between fair market value and your exercise price is a perquisite taxed as salary at your slab rate, regardless of whether you sell. At sale the further gain above that fair market value is taxed as capital gains. They are separate events under separate heads, often in different years. ### How is the perquisite value calculated? Fair market value at exercise, less the exercise price, times the number of shares. For a listed company the fair market value is derived from the market price on the exercise date under prescribed rules. For an unlisted company it must come from a Category-I merchant-banker valuation as of that date. ### What is the start-up ESOP tax deferral? For employees of DPIIT-recognised eligible start-ups, the perquisite tax at exercise is deferred to the earliest of 60 months from the end of the relevant tax year, the sale of the shares, or leaving the company - Section 392(3) (formerly 192(1C)), with eligibility under Section 140 (formerly 80-IAC). Confirm your employer's status first - if it is not eligible, the tax was due at exercise. ### How are RSUs taxed in India? An RSU has no exercise price, so the whole fair market value at vesting is a perquisite taxed as salary at your slab rate, usually with employer TDS. When you later sell, the gain above that vesting value is a capital gain. The vesting value is your cost basis, not zero. ### How is a US parent company's RSU taxed here? The perquisite at vest is taxed as Indian salary income exactly as a domestic grant would be. The sale is treated as an unlisted share disposal - twenty-four-month long-term threshold, slab rates on short-term gains - because foreign shares are unlisted for Indian tax. You must also report the holding in Schedule FA. ### Does the ₹60,000 rebate reduce tax on my ESOP gains? Not on capital gains taxed at a special rate. Section 156(3) of the Income-tax Act, 2025 caps the rebate at the tax on your income at the normal slab rates, so it cannot offset tax on listed short-term gains under section 196 or long-term gains under section 198 (formerly 111A and 112A). This calculator never applies it to the sale. ### What is fair market value for an unlisted company? A valuation by a Category-I merchant banker as of the exercise date, under the prescribed method. It is not the last funding round's price, not a 409A valuation, and not something this or any calculator can derive. Your employer normally provides it - ask for it in writing.