What is the default TDS rate on ESOPs/RSUs for NRIs?

The default rate is 30%. This is what your bank or AMC deducts if you haven't claimed DTAA benefits. With DTAA, this can drop to 10-15% depending on your country (10% for Gulf and most of Europe, 12.5% for UAE, 15% for US/UK/Singapore/Canada/Australia).

How much can I save on ESOPs/RSUs?

Typical savings range: Highly variable; ₹50k–₹5L+ per year (slab-rate at exercise, capital-gains-rate on sale). The exact amount depends on your country's DTAA rate and your investment size.

Income type guide

ESOP/RSU Income TDS

ESOPs from an Indian employer vested while you were resident, then exercised after you became NRI: India taxes the perquisite at your **slab rate** (10–45% depending on total income, NOT a flat 30%); your home country (US / UK / Singapore) often taxes the sale gain on the same shares. Without Form 67 FTC, you pay twice. With proper cross-border planning, ESOP/RSU effective tax can drop materially.

For Gulf NRI on ESOPs/RSUs

Default at-source TDS in India: 30%. Treaty rate (after Form 10F / Form 41 + TRC): 0%. Saving = 30 percentage points.

Article 22, resident country only

How it works

What happens to your esops/rsus as an NRI

**Exercise:** if you remain on Indian payroll at exercise, the Indian employer deducts TDS on the perquisite (FMV at exercise minus strike paid) at your slab rate via Section 192. If you've already relocated and are off Indian payroll at exercise, TDS shifts to Section 195 on the perquisite portion attributable to services rendered in India. Either way this is NOT a flat 30%: under Section 192 the rate can range from 10% (low income) to nearly 43% (top bracket plus surcharge plus cess); under Section 195 the rate follows what's applicable to the NRI on the relevant slice of Indian-source income. **Sale:** capital-gains TDS via Section 195 — 12.5% LTCG (held > 24 months from exercise for unlisted; > 12 months for listed under Section 112A) or 20% STCG (Section 111A for listed equity, post FA No.2 2024). Your home country often taxes the sale gain under its own rules — Form 67 (or Form 41 from FY 2026-27) lets you claim Foreign Tax Credit for the Indian tax under Rule 128 (or Rule 75 of the Income-tax Rules 2026); per CBDT Notification 100/2022, the deadline is the end of the relevant AY (31 March of the AY). US NRIs face additional Section 409A (deferred-comp non-qualified options) and ESPP-specific treatment; consult a US cross-border CA.

30%

Default TDS rate

Varies

DTAA rate by country

Gulf NRI — what changes for you

Country-specific overlay on ESOPs/RSUs

Indian tax IS your only tax

UAE has no personal income tax on individual savings interest, dividends, or capital gains. So the India-side rate (after DTAA reduction) is the FULL tax bite — no further drag in your country. NRE / FCNR exempt-in-India income flows through tax-free both sides. NRO / dividend income gets reduced via DTAA where treaty caps apply (UAE 12.5% on interest; Saudi 5% on dividends; etc.), and that reduced rate is your only cost.

ESOPs/RSUs rates by country

What each country's treaty says

Sorted by savings potential. 29 countries with a DTAA benefit, 2 with the same rate.

UAE

Article 22, resident country only

Default → DTAA

30%→0%

ESOP/RSU Income TDS

What happens to your esops/rsus as an NRI

Country-specific overlay on ESOPs/RSUs

What each country's treaty says

Overpaying on esops/rsus?