RSU Quick Facts — Microsoft India
| Parent company | Microsoft Corporation |
| Stock ticker | MSFT on NASDAQ |
| Brokerage account | E*TRADE (Morgan Stanley) |
| Indian employing entity | Microsoft India (R&D) Pvt Ltd |
| Typical vesting schedule | Bi-annual — typically February and August |
| LTCG holding period | 24 months from vest date |
| Schedule FA required? | Yes — report foreign shares as of Dec 31 |
| Typical grant size | SDE II (63) grants are typically 60–200 units over 4 years. |
How Are Microsoft India RSUs Taxed? — The 2 Stages
Stage 1 — At Vesting: On each vest date, the Fair Market Value (FMV) of your shares is added to your salary as a "perquisite" under Section 17(2) of the Income Tax Act. Microsoft India (R&D) Pvt Ltd deducts TDS on this amount. Microsoft India (MCIT) deducts TDS on RSU perquisite. TDS is reflected in Form 16 Part B.
Stage 2 — When You Sell: The gain above the FMV at vest is capital gains. Shares are treated as unlisted securities under Indian tax law — 24-month LTCG period applies. The LTCG rate is 12.5% without indexation (Finance Act 2024). STCG is taxed at your income slab rate (up to 30%). No TDS is deducted on capital gains — you must pay advance tax if your total gains tax exceeds ₹10,000.
Important: Must disclose shares in Schedule FA of ITR-2 as of December 31. Failure to disclose foreign assets attracts penalties of up to ₹10 lakh per year under the Black Money Act.
TDS & Sell-to-Cover at Microsoft India
Sell-to-cover: Sometimes — check your E*TRADE confirmation. Microsoft may sell shares to cover withholding.
Your Form 16 from Microsoft India (R&D) Pvt Ltd (Part B) will show the cumulative perquisite value for the financial year. This figure is what you report under Salary in your ITR. Cross-check it against your vest statements in E*TRADE (Morgan Stanley).
Your E*TRADE (Morgan Stanley) Account
Access E*TRADE at etrade.com/stock-plan. Year-end tax statements are available under Tax Center.
Keep the following documents each year: vest confirmation emails, annual brokerage statement, any Form 1042-S or withholding documents. These are your supporting evidence for the perquisite value and capital gains calculation.
Calculate Your Exact Microsoft India RSU Tax — Free
Enter your vest quantity, FMV, sale price and income — the calculator handles perquisite tax, capital gains, DTAA and your net after-tax amount.
🧮 RSU Tax Calculator →ITR Filing for Microsoft India Employees
File ITR-2 (or ITR-3 if you have business income). Report perquisite under Salary head, capital gains in the Capital Gains schedule, and foreign shares in Schedule FA as of December 31 of the previous calendar year.
For more detail on the full ITR filing process, see our RSU Tax in India — Complete Guide.