Short term Capital Gains arising out of Sale of RSUs of an unlisted US company, should be shown in Schedule CG as ‘quoted’ or ‘unquoted’ shares?
If it is to be shown as ‘unquoted’ shares - the ITR seems to ask for fair market value as computed by the prescribed method - But this is just an employee selling his RSU’s back to the company when they offer to repurchase it.
Can we just enter the same amount for full value consideration recieved and fair market valuye as computed by the prescribed method? (i.e., in both simply enter the value at which the RSUs where purchased back?)
The companies stock is not listed in the US stock exchanges.
Company offered RSU to employees which vested in FY24 - which was duly reported as perquisite in Form 16 and filed in schedule Salary & Schedule FA in FY24.
In FY25, company made a tender offer to employees to surrender back RSU. On acceptance of offer, consideration was paid out and RSU cancelled.
Question:
Does this transaction constitute sale of shares and attract CG - I suppose this is CG indeed.
In ITR - This has to be reported in Schedule CG, Schedule FA and Schedule FSI - correct?
For Schedule CG - I suppose it should be filled in STCG under, Assets other than A1 to 4, but there are two options there - Assets include shares of a company other than quoted shares and assets other than unquoted shares - What should be the choice here?
If answer to #3 is unquoted shares - There is a complicated rule to estimate FMV - do we, as employee, need to follow this? Or is it sufficient if we just enter the consideration received as FMV.
You are correct! The transaction constitutes short-term capital gains (STCG) since the RSUs are sold back to the company. Here’s how to handle it in your ITR:
Schedule CG: Report under STCG – assets other than A1 to A4. Since the company is unlisted, classify the shares as unquoted shares.
Fair Market Value (FMV): For employee RSU repurchases, you can safely enter the consideration received from the company as both the full value of consideration and FMV. You don’t need to compute FMV using the prescribed complicated method for unquoted shares.
Schedule FA & FSI: Include the foreign asset in Schedule FA (year-end value), and report any dividend or interest on these assets under Schedule FSI if applicable. Since the RSUs are repurchased, only cash received is relevant.
This approach aligns with ITD guidance and ensures accurate reporting without unnecessary complexity.
Ah! This arrived a bit too late for me. I already filed with FMV as 0. I reasoned that since I am not computing it as per prescribed method, it would be incorrect to put a wrong value in there - so a 0 (which is the default in the ITR), might signify that I haven’t computed it.
Anyway, thank you for the response, it will help me in future and others that are googling this up!