Abhishek Gupta 08 August 2022

[short version] save tax on us stock by gifting to parents with no income?

Parents have almost no income. I live in India and earn RSUs listed in USA from my employer as perquisites. Can I save tax by gifting them to parents who then sell them before 24 months (from the actual date of acquisition not date of gift) so that STCG applies and the tax on the profit from sale is charged by adding the profit to their normal income as per slab?

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LCI Thought Leader Adv. Ravish Bhatt, ADIT, CIOT (Dual Qualified lawyer/ Solicitor International Tax Affiliate CIOT) 08 August 2022

Hi there,

Regrettably, answer is NO.

Once RSUs are invested in your name, they are treated as your income in form of perquisites and your tax liability arises.

What you do afterwards e.g. gift to your parents or anything else, will not be relevant.

If they sell after you gift to them, STCG will additionally apply, albeit if they don't have any other income, that will help.

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Abhishek Gupta 08 August 2022

Hi Ravish Ji,

Thanks for replying. I have paid the taxes on the RSUs when they vested.

I am only concerned about the additional gains earned on the RSUs.