If you work at an MNC and hold foreign shares, this is the only guide you need. Every screen, every field, no CAs needed.
Non-disclosure penalty: Failing to report foreign assets in Schedule FA attracts a penalty of ₹10 lakh per year under the Black Money Act 2015 — even if the value is small. File ITR-2, not ITR-1, if you hold any foreign shares.
ITR-2 is mandatory — not optional — if you are salaried and have any of the following:
You hold shares, RSUs, or ESOPs in a company listed outside India (US, Germany, UK etc.)
You sold equity mutual funds, shares, or foreign securities during the year
Income from more than one employer, or house property income/loss
Interest from FDs, savings accounts, or dividends from stocks/MFs exceeding ₹5,000
Do not file ITR-1 if you have foreign RSUs. ITR-1 has no Schedule FA or Schedule CG for foreign assets. Filing the wrong form is treated as a defective return.
When your employer grants RSUs in a foreign-listed parent company, two separate tax events occur:
| Event | Tax Treatment | Reported In |
|---|---|---|
| At Vesting | FMV of shares = Perquisite under Sec 17(2). Added to salary, TDS deducted by employer. | Form 16 → Schedule Salary |
| At Sale (within 24 months) | STCG = Sale price minus FMV at vesting. Taxed at applicable slab rate. | Schedule CG → A5 |
| At Sale (after 24 months) | LTCG = Sale price minus FMV at vesting. Taxed at 12.5% without indexation. | Schedule CG → B8 |
| Every Year (holding) | Disclose holding value in Schedule FA. No tax on holding itself. | Schedule FA → A3 |
| Document | Why Needed | Where to Get |
|---|---|---|
| Form 16 (Part A + B) | Salary, TDS, perquisite value | HR/payroll portal |
| AIS | Cross-check all income, TDS, dividends | incometax.gov.in → Services → AIS |
| ESOP Platform Statement | RSU vesting, sale proceeds, taxes withheld | equateplus.com / fidelity.com |
| MF Capital Gains Statement | LTCG/STCG on mutual fund redemptions | CAMS, KFintech, or AMC website |
| Bank Interest Certificates | Savings + FD interest breakdown | Net banking → Statements |
| Previous Year ITR PDF | Schedule FA closing balance as this year's opening | incometax.gov.in → e-File → View Filed Returns |
The first portal question asks why you are filing. For most salaried employees:
Select: "Taxable income is more than basic exemption limit"
This is the correct choice if your gross salary exceeds ₹3 lakh (new regime) or ₹2.5 lakh (old regime).
Do NOT select "Seventh Proviso to Section 139(1)" — this is only for people whose income is below the exemption limit but are filing due to high-value transactions (₹1 crore+ in current account, ₹2 lakh+ foreign travel, etc.).
| Schedule | Select? | Reason |
|---|---|---|
| Part A-Gen | ✅ Always | Mandatory — auto-selected |
| Schedule Salary | ✅ Always | Your primary income |
| Schedule CG | ✅ Always for RSU holders | Foreign RSU gains/losses must be reported |
| Schedule OS | ✅ If interest/dividend income | Savings interest, FD interest, dividends |
| Schedule FA | ✅ Mandatory if foreign shares held | Disclosure under Black Money Act |
| Schedule 112A | ✅ If sold domestic equity MF/shares | Transaction-level LTCG detail |
| Schedule VI-A | ✅ If any deductions (80TTA etc.) | Savings interest deduction |
| Schedule HP | Only if house property | Home loan interest (not claimable in new regime) |
| Schedule FSI/TR | Only if claiming foreign tax credit | See Step 13 |
| Schedule 5A | ❌ Skip | Only for Goa/Daman residents (Portuguese Civil Code) |
The portal asks several yes/no questions. Here are the answers for a typical salaried RSU holder:
| Question | Answer |
|---|---|
| Opt out of new tax regime (115BAC)? | No — unless old regime saves more tax |
| Rule 2BB allowances (travel/daily allowance)? | No |
| Transport allowance for handicapped? | No |
| 80CCD(2) employer NPS contribution? | No — unless your employer contributes to NPS |
| Residential status condition? | "In India for 182 days or more [Section 6(1)(a)]" |
| Benefit u/s 115H? | No — for NRIs becoming resident only |
| Portuguese Civil Code / Section 5A? | No |
| FPI (Foreign Portfolio Investor)? | No |
| Director in a company? | No — if you are only an employee |
This is pre-filled from your Form 16. Verify each field carefully:
| Field | What It Should Show |
|---|---|
| 1a — Salary u/s 17(1) | Basic salary + allowances from Form 16 |
| 1b — Perquisites u/s 17(2) | RSU vesting value — this is the FMV at vesting × number of shares |
| Standard deduction u/s 16 | ₹75,000 (auto-filled for FY 2025-26) |
| Net taxable salary | Gross salary minus standard deduction |
Your RSU vesting value appears under "Stock options (non-qualified options) other than ESOP" in the perquisites breakdown. This is correct — the perquisite is already included in your Form 16 and TDS has been deducted on it.
This is the most important schedule for RSU holders. It has distinct sections for different asset types.
Foreign shares are not listed on Indian exchanges, so they go under A5 — "From sale of assets other than at A1 or A2 or A3 or A4".
| Field | What to Enter |
|---|---|
| A5a(ii) — Full value of consideration | Total sale proceeds in INR (convert using SBI TTBR rate on transaction date) |
| A5b(i) — Cost of acquisition | FMV at vesting date in INR × number of shares sold (this was taxed as salary — your cost basis) |
| A5b(iii) — Expenditure on transfer | Brokerage, transaction fees in INR (if any) |
| A5e — STCG amount | Auto-calculated. Negative = capital loss, positive = capital gain |
Sell-to-cover transactions almost always result in a small loss. When your employer sells shares to cover tax at vesting, the sale happens on the same day at the same FMV — but brokerage and transaction costs create a small net loss. This loss is valid and should be reported.
For domestic equity mutual funds and shares sold with STT paid, use B3. This section pulls from Schedule 112A which you fill separately (see next step).
If you held foreign RSU shares for more than 24 months from vesting date before selling, use B8 with the same cost basis logic as A5.
This schedule requires transaction-level detail for every equity MF or share sold with STT paid during the year.
The portal supports CSV upload — but the column format must match exactly. Always download the template directly from the portal. The key dropdown in column 1a:
| Your situation | Select in Column 1a |
|---|---|
| Units/shares purchased after 1 Feb 2018 | "After 31st January 2018" |
| Units/shares purchased on or before 1 Feb 2018 | "On or Before 31st January 2018" (FMV as on 31 Jan 2018 applies as grandfathered cost) |
Consolidation shortcut: If you have multiple SIP units of the same ISIN redeemed on the same date, you can consolidate them into a single row by summing the quantity, full value, and cost. No need to enter each SIP installment separately.
After all rows are entered, the total Balance (column 14) flows automatically into B3a of the main Schedule CG.
If your foreign RSU sales result in a net loss, here is exactly how it flows:
Loss appears as a negative figure (e.g., -₹20,000)
Portal attempts to set off STCG loss against LTCG gains automatically
Any remaining unadjusted loss flows here
Remaining loss carried forward for up to 8 years to offset future capital gains
Set-off rules: STCG loss can be set off against both STCG and LTCG gains. LTCG loss can only offset LTCG gains. The portal handles this automatically in the Section E set-off table.
Enter all passive income here. The breakdown between sub-fields matters:
| Field | What to Enter | Why It Matters |
|---|---|---|
| 1a(i) — Dividend income | Total dividends from Indian stocks and MFs | Reported to AIS by companies — must match |
| 1b(i) — Savings bank interest | Interest from savings accounts only | Triggers 80TTA deduction in VI-A |
| 1b(ii) — Deposit interest | FD, RD, post office interest | Not eligible for 80TTA |
| 1b(ix) — Others | Interest from NBFCs, companies | Not eligible for 80TTA |
Common mistake: Entering all interest under "Others" (field ix) instead of splitting into savings (bi) vs deposits (bii). If savings interest is in the wrong field, the portal won't auto-populate 80TTA in Schedule VI-A.
Under the new tax regime, most Chapter VI-A deductions are not available. For salaried RSU holders, typically only one applies:
80TTA — Savings Bank Interest Deduction
Maximum ₹10,000 per year on savings bank interest (not FD). Requires correct entry of savings interest in Schedule OS field 1b(i) first. Not available for senior citizens (80TTB applies instead).
Mandatory every year. Schedule FA uses the calendar year (Jan–Dec), not the financial year (Apr–Mar). For AY 2026-27, it covers January 1, 2025 to December 31, 2025.
This is where you disclose your foreign company shares (RSUs/ESOPs).
| Field | What to Enter | Source |
|---|---|---|
| Country Name and Code | e.g., 49-Germany, 01-USA | ITR country code list |
| Name of entity | Company name (e.g., XYZ Corp SE) | ESOP platform |
| Nature of entity | ESOP / Equity (RSU + Shares) | — |
| Date of acquiring (field 7) | Date of first RSU vesting still held | ESOP platform |
| Initial value (field 8) | INR value at Jan 1, 2025 = previous year's closing | Previous ITR Schedule FA |
| Peak value (field 9) | Highest INR value during Jan–Dec 2025 | ESOP platform + exchange rate |
| Closing balance (field 10) | INR value of holding at Dec 31, 2025 | ESOP platform + Dec 31 exchange rate |
| Gross amount paid/credited (field 11) | Dividends received (in INR) during calendar year | ESOP platform dividend history |
| Gross proceeds from sale (field 12) | Total sale proceeds (in INR) during calendar year | ESOP transaction statement |
Continuity tip: Always use your previous year ITR's Schedule FA closing balance as this year's opening (field 8). This creates an auditable chain across years and avoids scrutiny notices.
Use the SBI TTBR (Telegraphic Transfer Buying Rate) as specified under Rule 115A for converting foreign currency to INR on any transaction date. For year-end balances, use the Dec 31 RBI reference rate.
Only fill these if all three conditions are met:
Your ESOP platform withheld German/US/UK tax on RSU vesting or sale
The same foreign transactions result in a net taxable income in India
You must file Form 67 on the portal BEFORE the ITR deadline — it's a separate form
If your RSU transactions resulted in a net loss, there is no Indian tax liability to offset. Do not fill Schedule FSI/TR. Unutilized foreign tax credit does not carry forward under Rule 128.
| Line | What to Check |
|---|---|
| Line 1 — Salaries | Net taxable salary after ₹75,000 standard deduction |
| Line 3 — Capital Gains | Net taxable CG after set-off (0 if below ₹1.25L exemption or net loss) |
| Line 11 — VI-A Deductions | 80TTA amount if applicable |
| Line 16 — Losses to carry forward | STCG loss for future years (from Schedule CFL) |
Pay via e-Pay Tax → Challan 280 → Self Assessment Tax (300) using net banking or UPI. The challan auto-attaches to your return. After payment, submit the return.
Without e-verification, your return is treated as not filed. Use Aadhaar OTP (fastest — instant verification) under e-Verify Return on the portal.
Even if your foreign RSU sales net to a loss, you must report them. The loss carries forward 8 years and can offset future gains — skipping it means losing that benefit.
₹10 lakh penalty per year under the Black Money Act. Even a small holding must be disclosed every year without exception.
ITR-1 has no Schedule FA. If the department's FATCA/CRS data shows foreign holdings but your ITR has no Schedule FA, you will receive a scrutiny notice.
Schedule FA uses calendar year (Jan–Dec). Entering April–March dates makes your return inconsistent with FATCA data the government receives from foreign financial institutions.
Form 67 must be filed before the ITR deadline, not after. If you only fill Schedule FSI/TR without Form 67, the credit claim will be disallowed during processing.
80TTA only works if savings bank interest is in field 1b(i). If it's in field 1b(ix) "Others", the deduction won't auto-populate in Schedule VI-A.
The cost of acquisition for capital gains is the FMV at vesting (which was already taxed as salary perquisite). Using zero results in double taxation — you pay tax on the same value twice.
After completing all schedules, the Internal Validation threw 4 errors before submission. Here's exactly what they were and how to fix them — so you don't waste time:
Error: "Kindly select the appropriate option for secondary address in Schedule Part A General"
Fix: Go to Part A-Gen → scroll to address section → find the question "Is secondary address same as primary address?" → select Yes. This field is easy to miss since it's not prominently visible.
Error: "Please Select from the drop down at field Nature of Employer in Schedule Salary"
Fix: Go to Schedule Salary → Edit employer → find "Nature of Employer" dropdown → select "Others" for private sector MNC employees. Do not leave it blank even if pre-filled data exists.
Error: "Description is mandatory if Any Other is selected. Please enter Description in Value of perquisites as per section 17(2)"
Fix: Go to Schedule Salary → perquisites section → change Nature of perquisites from "Other benefits or amenities" to "Stock options (non-qualified options)". This removes the description requirement entirely and is the correct classification for RSUs.
Error: "Please select dropdown in profit in lieu of salary as per section 17(3) in Schedule Salary"
Fix: Even though the amount is ₹0, the portal requires a dropdown selection. Select "Any compensation due or received by an assessee from an employer in connection with the termination of his employment" (first option). Amount stays ₹0. This is a portal quirk — it forces a selection regardless of amount.
112A CSV Upload Tip: The portal's CSV upload for Schedule 112A rejects the column 1a value if it doesn't exactly match the dropdown. The correct text is "After 31st January 2018" — full spelling of "January", not "Jan". If CSV keeps failing, consolidate all same-ISIN transactions into one row and enter manually using "+ Add Another". Two rows (one per company) is perfectly acceptable.
Schedule CG not in schedule list? If you don't see Schedule CG in your schedule list, go back to "Select Schedule" page and add it from the Capital Gains section. Without Schedule CG, CYLA/BFLA/CFL will show ₹0 for all CG rows and your RSU loss won't be captured or carried forward.
One of the most time-consuming parts of ITR-2 is gathering your MF capital gains data across multiple SIPs. Groww automatically tracks all your mutual fund and stock transactions and generates a ready-to-use capital gains report — making Schedule 112A filing much faster.
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