Income Tax Return Filing for ESOPs & RSU

Have you made any income through ESOPs and RSUs? At FirstFiling, our team of Chartered Accountants can help you file your income tax returns on ESOPs and RSUs!

Documents Required

Form 16 from your company

Form 26AS Tax Credit Statement

Details of eligible duties to be carried forward

Capital Gain statement on Sale of ESOP or RSU

Any other Document (if, any)

Investment Proof's

FirstFiling - ESOPs & RSUs & ITR-U Form

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File your ITR on ESOPs & RSUs in 4 easy steps

1. Sign up & Purchase

Sign up and purchase the relevant plan by filling out the form above.

2. Share your details

Provide all the required information and relevant documents, as mentioned above.

3. Consultation

Consult with our experts to get answers to all your queries on ITR filing for ESOPs & RSUs.

4. ITR Filing

Our Chartered Accountants will file your ITR as per the details shared by you.

ITR Filing for ESOPs & RSUs

Pricing Plans

Silver

₹2499/-

  • Tax filing for salaried individuals with single & Multiple Form 16 
  • Tax Due/Refund Status and Filing Confirmation
  • CA Assisted Tax Filing for the sale of ESOP and RSU
  • Any Slab of Income
  • Income from other Sources, House Property Income
  • Director's Declaration in any company
  • Whatsapp Call / Email Support
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Platinum

₹1999/-

  • Updated Tax Return (ITR-U) filing   
  • Any Income Slab
  • Tax Due/Refund Status and Filing Confirmation
  • CA Assisted Tax Filing for the sale of ESOP and RSU
  • Income from other Sources, House Property Income
  • Director's Declaration in any company
  • Whatsapp Call / Email Support
Buy Now

Filed your ITR? Here’s what you need to do now…

Steps for Verify E-Filing

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Once your filing is complete, you can track the filing status.

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Benefits of ITR Filing

Why File Your Income Tax Return?

File ITR Now

If you've paid a higher income tax than your actual tax liability, you should file income tax returns to claim a refund. After verification, you’ll get the refund directly into your bank account!

Applying for a Visa to visit a foreign country? You'll most likely have to submit your ITR so the embassy can analyse your income and tax status.

Your income stability is critical for the lenders. This is why you’ll have to submit your ITRs of at least 3 consecutive years when applying for loans.

You should file your income tax returns every year before the due date to avoid any penalties or other severe consequences.

Don't Know Which ITR to File

Types of Income Tax Return Form

The total income of an individual must not exceed Rs.50 lakh. His/her source of income must be:

Salary

One Hopuse Property

Other Sources Of Income, I.E., Interest Income, Dividends, Etc.g

Agricultural Income Up To Rs.5,000 Only.

Individual Must Be Ordinarily Resident In India.

A salaried individual can file his/her tax return using the ITR-2 form if:

Has A Total Annual Income Of More Than Rs. 50 Lakh.

Is A Director Of A Corporation.

Owns Unlisted Equity Shares.

Is Owning Assets Outside Of India Considered Income From Salary, Multiple Homes, Capital Gains, And Other Kinds Of Revenue.

Is A Member Of The Hindu Undivided Family (HUF).

A Resident Or A Non-Resident (Both Ordinarily Or Not Ordinarily).

by an individual or a Hindu Undivided Family having income from the following sources are eligible to file ITR-3:

Pursuing A Profession Or Business.

Invested In Unlisted Equity Shares During The Fiscal Year.

An Individual Director Of A Firm.

The Return Could Include Earnings From Rental Property, Salaries, Pensions, And Other Sources Of Income.

Income Earned As A Partner In The Company.

Individuals, HUFs, and partnership firms having the following total annual income are required to file Form ITR 4:

Business Income As Per Section 44AD Or Section 44AE.

Earnings From A Profession As Determined Under Section 44ADA.

Having A Salary Or Pension That Is Up To Rs. 50 Lakh.

Income From A Single Residential Property Earning Up To Rs. 50 Lakh (Including The Brought Forward Loss Or Loss To Be Carried Forward Cases Under This Head).

Up To Rs. 50 Lakh In Income From Other Sources (Including Winning From The Lottery And Income From Horse Races).

All you need to know about

Taxation on ESOPs and RSUs

Understanding ESOPs & RSU

An individual with an Employee Stock Option is the one who has the right to purchase a stock at a future date, at a predetermined price decided at the time the individual took those stock options. So, the future market price of a stock does not matter and the individual will always have the option to purchase the stock at the predetermined price. But, if the stock’s current market price is lower than the predetermined price, the customer can choose to not exercise the stock option.

RSU or Restricted Stock Units are the company stock that an employee receives from the company where they agree to the trade, subject to the involvement of a vesting period. A vesting period is the duration for which the employee must wait to claim the shares allotted by the company.

Tax Planning for ESOPs & RSUs

You must plan for tax liabilities in advance to avoid any last-minute surprises and ensure compliance with tax regulations.

One strategy to minimize your tax liability is to spread out the sale of your stocks over multiple years. This will help you stay in a lower tax slab and reduce the amount of tax you owe. You can also use tax-saving instruments like ELSS or PPF to save on taxes.

Available Deductions

When it comes to ESOPs and RSUs, you can claim expenses as deductions on taxes. Such expenses include brokerage fees, legal fees, and accounting fees. These expenses are typically incurred when acquiring, managing, or disposing the ESOPs or RSUs.

How to file an Income Tax Return for the sale of ESOP or RSU?

Collect all necessary documents such as Form 16, Form 26AS, and transaction statements from your employer and/or stockbroker.

Determine your tax liability based on the capital gains from the sale of your ESOP or RSU.

Check applicable tax rates for your capital gain.

Claim deductions available under the Income Tax Act, such as deductions for home loan interest or charitable donations.

Pay any balance tax.

File ITR before the due date.

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Frequently Asked Questions

ESOPs (Employee Stock Ownership Plans) allow employees to buy company stock at a reduced cost and vest over time. RSUs (Restricted Stock Units) represent a promise to deliver stock at a future date and vest over a set period, without requiring an exercise price.

ESOPs and RSUs are subject to taxation at two stages: (1) at the time of exercise or vesting, and (2) at the time of sale. The difference between the fair market value (FMV) of the shares at the time of exercise or vesting and the price paid by the employee is treated as a perquisite and added to the individual's taxable income. Subsequently, any capital gains arising from the sale of the shares are also taxable. Normally, the taxation of the ESOPs and RSU happens twice i.e. the first time is when they are issued/ exercised by the employees and the second time is when they are sold in the open market.

The "bargain element" refers to the discount that employees receive when exercising their stock options. This bargain element is taxable as ordinary income.

One strategy is to spread out the sale of your stocks over multiple years to stay in a lower tax slab. You can also consider using tax-saving instruments like ELSS or PPF.

Yes, certain expenses such as brokerage fees, legal fees, and accounting fees incurred when acquiring, managing, or disposing of ESOPs or RSUs can be claimed as deductions.

You will need Form 16 (issued by your employer), Form 26AS, ESOP or RSU grant letter, ESOP or RSU sale statement, bank statements, and any other relevant documents.

Gather all necessary information related to your ESOPs and RSUs, determine the type of income, understand the tax rules and regulations, and seek professional advice to accurately report your income on your tax return.

Collect all necessary documents, determine your tax liability based on capital gains, declare the capital gains in ITR, check applicable tax rates, claim deductions, pay any balance tax, and file the ITR before the due date.

However, in some cases, if the assessee has paid the advance tax more than the tax on the Gain of ESOP's and RSU's, then in these types of cases depending upon the total income assessee can get the refund or pay the due tax liability.

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