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Yes, RSUs are taxed when they vest, as they are considered part of your salary income. So, even if you do not sell them, they are still taxable.
In India, RSUs from US companies are taxed in two states. The first stage is at the time of vesting, in this stage, it is treated as salary income, and the second stage is during the time of sales as capital gains.
The tax rate on RSUs depends on their holding period. If they are sold within 24 months of holding, they are taxed as per the income tax slab rate of an individual. Further, if they are sold after 24 months of holding, they are taxed at 12.5%.
NRIs are only to pay tax in India on RSUs if they are Indian residents or receive RSU income from Indian sources.
To avoid double taxation on RSUs, use Form 67, claim foreign tax credit (FTC) under the India-US DTAA.
By Vikram Agrawal |Last Updated: November 5, 2025
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