RSU Cost Basis Across Multiple Years in India: the 2026 FIFO and FX Guide

# RSU Cost Basis Across Multiple Years in India: the 2026 FIFO and FX Guide

"The first vest is easy. The fifteenth vest, across three grants, two currency regimes, a partial sale, and a Schedule FA lookback - that is where most spreadsheets crack. The Indian tax rules are simple. The bookkeeping is not."

Quick answer

• Each vest is its own cost basis lot. The lot's INR cost basis = foreign close price × SBI TT buying rate on vest date.
• Sales follow FIFO by default. Oldest unsold tranche is reduced first.
• Holding period is 24 months for foreign shares. Less = STCG (slab); more = LTCG (12.5 percent, no indexation post Budget 2024).
• FX drift matters. Multi-year vests carry different INR cost bases because the rupee-dollar rate changed. Even a flat USD price can show an INR gain.
• Schedule FA is by calendar year. Each vest is a row, by acquisition year. Partial sales reduce the unsold portion but the row persists.
• Perquisite leg cannot be offset against capital losses - different income heads.

The two-leg structure, restated

This guide assumes you already know the basics from the RSU vesting and Section 17(2) tax guide. To recap so the rest of this article makes sense:

• At vest - the FMV of the vested shares in INR is salary perquisite under Section 17(2). The employer withholds TDS by sell-to-cover.
• At sale - the gain over the INR cost basis is capital gains. Holding period determines STCG vs LTCG. Indexation does not apply to foreign shares post Budget 2024.

The first leg is fixed at vest date and that number is unchangeable - it is on Form 16. The second leg is what the rest of this guide focuses on, because it spans years and is the surface where mistakes happen.

Step 1: capture FMV-in-INR per vest

For each vest event, you need:

1. The foreign currency (usually USD).
2. The number of vested shares (after sell-to-cover or before, depending on what you are tracking - track gross vest plus the sell-to-cover separately).
3. The closing price of the share on the vest date on the foreign exchange. For NYSE/NASDAQ-listed stocks, use the official closing print.
4. The SBI TT buying rate for USD on the vest date.
5. The INR cost basis per share = closing price × SBI TT rate. The total INR FMV = shares × per-share basis.

This is what your employer's Form 16 perquisite number should approximate (with small rounding differences). If the two diverge meaningfully, the Form 16 number is the basis you defend in the ITR.

Example: 100 RSUs vest on 15 March 2025 of a US-listed stock closing at $250.00. SBI TT USD buying rate that day = ₹85.40. INR cost basis per share = ₹21,350. Total INR FMV = 100 × ₹21,350 = ₹21,35,000.

Store the lot:

`` Lot: 2025-03-15 Shares vested: 100 Foreign close: USD 250.00 SBI TT rate: 85.40 Per-share INR basis: 21,350.00 Total INR cost basis: 21,35,000.00 Currency: USD Country: US ``

Repeat for every vest. Across a 4-year vest cycle on a typical grant, this is 16 lots (quarterly) per grant. Two grants stacked = 32 lots. Add ESPP every 6 months = 8 more lots. The bookkeeping grows fast.

Step 2: FIFO chain on sale

When you sell shares, Indian tax practice treats the oldest unsold tranche as the source. The lot is reduced first; if the lot is exhausted, the next-oldest lot fills the remainder.

Example, continued: suppose by July 2026 you have three lots:

`` Lot A 2024-03-15: 100 shares, basis ₹19,80,000 (per share ₹19,800) Lot B 2024-09-15: 100 shares, basis ₹20,40,000 (per share ₹20,400) Lot C 2025-03-15: 100 shares, basis ₹21,35,000 (per share ₹21,350) ``

You sell 150 shares on 20 July 2026 at USD 300 each. SBI TT buying rate on 20 July 2026 = ₹86.20. INR sale per share = ₹25,860. Total INR sale value = 150 × ₹25,860 = ₹38,79,000.

The FIFO chain says: 100 shares come from Lot A, 50 shares come from Lot B.

• Lot A leg: 100 × (₹25,860 − ₹19,800) = ₹6,06,000 gain. Holding period = 20 July 2026 − 15 March 2024 = 28.2 months → LTCG.
• Lot B leg: 50 × (₹25,860 − ₹20,400) = ₹2,73,000 gain. Holding period = 22.2 months → STCG.

Total capital gain on this sale = ₹8,79,000. Of which LTCG = ₹6,06,000 (taxed at 12.5%), STCG = ₹2,73,000 (taxed at slab rate).

Notice the same sale event splits into two tax classifications because the FIFO chain crossed a holding-period boundary.

Step 3: account for currency drift

The previous example used illustrative numbers but the asymmetry of INR cost bases across lots is real. Consider USD strengthening or weakening across vest years:

• A vest at USD 1 = ₹76 in 2022 gives a per-share INR basis lower than the same USD share price would give at USD 1 = ₹86 in 2026.
• The same sale today translates to INR using today's rate. The sale-side INR is higher just because the dollar is stronger.

This means a "flat" sale (the USD share price did not move) can still produce an INR gain on the older lot. This is not a quirk - it is the income tax department's recognition that you are an Indian taxpayer and your capital gain is denominated in INR, not USD.

For multi-grant stacks across multiple years, this means each lot has to be tracked individually. A "weighted average cost basis" across all lots is wrong and will not match the FIFO chain that the tax position requires.

Step 4: classify STCG vs LTCG correctly

The 24-month rule for foreign-listed shares:

• Holding period > 24 months from vest date = LTCG. Taxed at 12.5 percent (post Budget 2024, no indexation for foreign shares).
• Holding period ≤ 24 months = STCG. Taxed at slab rate.

For Indian-listed shares (rare for RSU in India but possible):

• > 12 months = LTCG. Taxed at 12.5 percent above ₹1.25 lakh per year (post Budget 2024 rates).
• ≤ 12 months = STCG. Taxed at 20 percent (post Budget 2024).

The vest date is the reference point, not the grant date. The grant date is when the employer promised the shares; the vest date is when you owned them. Tax holding starts at vest.

Step 5: build Schedule FA for the calendar year

Schedule FA is the foreign assets disclosure. It is by calendar year (1 Jan to 31 Dec) and disclosed on the financial-year ITR for the year that includes that calendar year. For each lot you held during the calendar year, you disclose:

• Country code (US, UK, etc.)
• Name of the entity (the issuing company)
• Address of the entity
• Date of acquisition (vest date)
• Initial value of investment in INR (your cost basis)
• Peak value during the period (in INR)
• Closing value at end of period (in INR)
• Total gross income during the period from the asset (dividends, if any)
• Income offered to tax in India

Each vest lot is a separate row. Partial sales reduce the unsold portion - the row stays disclosable as long as any shares remain. Fully sold lots drop off the next year's Schedule FA but the income from the sale (capital gains) appears in the Capital Gains schedule for the relevant FY.

The brokerage settlement account (Schwab/E*TRADE/Fidelity) is also Schedule FA disclosable - it is a foreign bank account by Schedule FA's broader definition. Disclose peak balance and closing balance, in INR.

Penalty for missing Schedule FA: ₹10 lakh per year of non-disclosure under the Black Money Act 2015, even if the asset value is zero. This is separate from the income tax leg. Many high-income earners miss this because the perquisite TDS at vest feels like the tax was paid; it does not cover Schedule FA.

Step 6: tax-loss harvesting and offset rules

Capital losses on RSU sales can be set off against capital gains:

• STCG loss offsets STCG or LTCG in the same financial year.
• LTCG loss offsets LTCG only.
• Unutilised losses carry forward 8 financial years.

The perquisite leg under Section 17(2) is salary income and cannot be offset against capital losses - it is a different income head. This is the most common misconception. The tax you paid at vest stays paid regardless of what the share price does after.

A common multi-year planning move: time a known-loss sale (RSU lot bought at high INR FMV that has dropped) into the same FY as a known-gain sale to net the position. Qubera and INDmoney both surface this; manual tracking is error-prone here because the loss/gain status depends on the FX-adjusted INR cost basis, not the visible USD price drift.

Step 7: handle acquisitions and stock splits

Cash-for-shares acquisition (your employer is bought for cash): treated as a sale event at the cash-conversion price. Capital gains apply.

Stock-for-stock acquisition (your shares convert to the acquirer's stock): generally tax-neutral under Section 47 if the exchange ratio is defined and there is no cash component - the cost basis carries over to the new shares; holding period continues.

Stock split or reverse split: cost basis splits proportionately. 100 shares at ₹20,000/share that becomes 200 shares post 2-for-1 split is now 200 shares at ₹10,000/share.

Spin-off (your employer spins off a subsidiary into a separate listed stock): cost basis allocates between the parent and the spin-off based on the relative market value at spin-off date. Documentation from the US broker should provide the allocation; the Indian tax position uses the same allocation in INR.

The data discipline that survives this complexity

If you are doing this in a spreadsheet, the column set is:

1. Lot ID (e.g., GRANT1-VEST3)
2. Vest date
3. Shares vested (gross)
4. Foreign close price
5. Currency
6. SBI TT rate on vest date
7. Per-share INR basis
8. Total INR cost basis
9. Shares sold to date
10. Cumulative sale value INR
11. Remaining shares
12. Remaining INR basis
13. Holding period months
14. Current classification (STCG eligible / LTCG eligible)

For each sale event, you split it into one row per source lot, computing the gain/loss per source. Then you classify into STCG or LTCG by the holding period of each source lot.

At year end, Schedule FA pulls from the lots whose remaining shares are non-zero, grouped by calendar year of acquisition.

This works for two or three vests. By eight vests across two grants, the spreadsheet is brittle. By thirty vests, manual tracking is a known source of disclosure errors that the Black Money Act penalises heavily.

When an app helps

The mechanical nature of the FIFO chain and the Schedule FA grouping makes this a strong fit for automation. The apps that handle multi-year RSU well are reviewed in Best app to track US RSUs from India (2026). The shortlist is Qubera, INDmoney, Cube Wealth - with Qubera being the only one built specifically around the India tax + Schedule FA disclosure as the primary use case.

The right test for any RSU tracking tool is whether it can answer this question correctly: "If I sell 250 shares on this date at this price, what is my STCG, what is my LTCG, and what does my Schedule FA look like for this calendar year?"

If the tool gives you a number without breaking out per-source-lot gains, it is averaging - and averaging is wrong for the multi-year case.

When NOT to obsess over multi-year cost basis

• Your RSU exposure is small (one or two vests, low value). The bookkeeping is overhead.
• You sell every vest the day it vests (no holding period accrued). The capital gains leg is short-term and trivial; the perquisite leg dominates.
• You have a CA who reconstructs this annually from your broker statements and you trust their process.

For everyone else - especially MNC employees with 4+ years of vests stacking up - the multi-year cost basis is the difference between a clean ITR and a notice from the assessing officer about Schedule FA gaps.

Further reading

• RSU vesting + Section 17(2) tax guide - the underlying tax rules
• Best app to track US RSUs from India (2026) - the tooling layer
• ESOP tax deferral for eligible startups - if your equity is from an Indian startup
• Best app for salaried tax optimisation in India (2026) - the broader tax planning surface
• HENRY India money management - the broader high-income money OS