Taxation on ESPP in India

Feb 12, 2021 8 Comments

I recently purchased my first lot of MSFT shares via ESPP and have a few queries,
1. There was no tax deducted from my contribution. My total contribution of $1k was used for buying 5 shares of Microsoft @200$. So am i still liable to pay 30% tax on my contribution from salary?
2. Once i sell my shares at say $240, how do i get the money and how is the conversion from USD to INR going to happen? Who will be responsible for doing the conversion, banks or Fidelity ? I am using the netbenefits.com for all MSFT share transactions.
3. Is it possible to just sell the shares but not convert from USD to INR and do the conversion at my convenience?
4. How does taxation take into account the capital gain and my pending tax of 30%? Do i get taxed in US and India? Or just in one country?

I am working from Microsoft office in Hyderabad, India.

#ESPP #msft #msftstock

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TOP 8 Comments
  • Nutanix
    thedude_

    Go to company page Nutanix

    thedude_
    1. You are buying ESPP from your post tax money. For buying you will be additionally taxed only for 15% discount rate you get in espp from market price.
    2. You will not be taxed in US.. you are Indian tax resident so will be taxed in india only.
    3. You can sell espp and keep the proceeds in netbenefits account and transfer to Indian account later when you have better conversion rates. Microsoft will put the initial gains of 15% from market price in form12b/form 16 and calculate you tax. Any additional gains on top of it.. needs to be reported by you in tax returns.
    Feb 12, 2021 5
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