r2i forum

Hi,

Need a help in understanding the vesting ESOP alloted by my company.

I have about stock options alloted to me by my company and I need to vest them before the date expires. Here is my situation:

I had been alloted stocks in 2006 by my Indian company and I can buy these and sell them now. I am still with same company but, transferred to US since June 15 2010 and I am not sure what is my status now. I am confused:confused:

1. Will I be treated as NR OR RNOR?
2. If RNOR, is there a different taxation? Will I be considered as RNOR?
3. Will there be a different perquisite taxation for RNOR?
4. Do I have to open NRE/NRO account if considered as RNOR?

Request someone to help me with this. Thanks.

Regards,
Shailesh

There are already many threads on ESOPs. Just put the word above in google search. I think if you search you will find relevant threads for your query where your query would be more appropriate.

Hi Shailesh,

No worries, based on the information provided we believe that the ESOP's are of company Incorporated in India. When you exercise these shares your company will be deducting taxes on the profit you make and the end of the year will be issuing you a Form 16. The implications of ESOP excercise are simpler as compared to that in the USA, where you need to bifurcate between your earned income and capital gains. In India the complete gains is considered as your salary income and taxed accordingly. Your status in India will be that of RNOR since you were transfered to US on June 15, 2010 and we assume that you stayed in India itself before that date.

Note: Since you will be a resident in US in 2010, as you will be staying in US for more than 180 days, you need to take of the global reporting from the US point of view. We have been assisting US Expats and Inpats in filing both US as well as India tax returns since 2006.

Regards,
KKA