I am moving back to India from overseas via an internal transfer within my company. I recently was made aware of my India salary and wanted to understand how much will I actually end up getting in hand. Apologies in advance if the info below is missing some details as I am still waiting for the breakup - Base pay - 71 lakhs Stock compensation - 30 lakhs I wanted to understand what tax will I end up paying based on the above. Any guidance will be very helpful. Thank you.
Ideally on salary of 71 lacs you will have following deductions per month
Provident fund it can be from Rs. 1800 to 12% of your basic salary
Professional tax Rs. 200
Income tax depends upon selection of old regime or new regime.
Approx. Tds working yearly based on new slab selection wil be around Rs. 30.8 Lacs in total income of 1.01 crore
Hi,
Can you help with some more details on stock compensation ? Like ,
- Will you get RSU/ESPPs from your company ?
- Any idea of their vesting period ?
Thanks
Damini
For the tax calculation on your Indian salary, the total income you mentioned includes base pay of ₹71 lakhs and stock compensation of ₹30 lakhs, totaling ₹101 lakhs (₹1.01 crores). Here’s a general breakdown of how your taxes might work:
1. Income Tax Slabs for FY 2023-24 (Old Regime):
In addition, a cess of 4% is applied on the total tax amount.
2. New Tax Regime Slabs (2023-24):
You can choose between the old tax regime, which allows deductions under sections like 80C (₹1.5 lakh), 80D, HRA, etc., or the new regime, which has lower rates but disallows most deductions.
3. Salary Breakdown:
4. TDS and Advance Tax:
Your employer will deduct TDS (Tax Deducted at Source) on your salary. You may also need to pay advance tax quarterly if the tax liability exceeds ₹10,000 for the financial year.
Let me know if you'd prefer a detailed breakdown of tax computations under both regimes!
Best regards,
For detailed, personalized advice, consider a phone consultancy.
Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.
Thank you.
Shubham Goyal
The stock compensation is essentially RSUs which I will get from the company. They will vest in March and Sep next year. I don't know yet whether in India it is counted as salary or not.
In India, RSUs (Restricted Stock Units) are typically taxed as part of "Income from Salaries" at the time they vest. Here's how the taxation works for RSUs:
Tax Treatment of RSUs in India:
At the Time of Vesting:
Tax Slab Impact:
Capital Gains Tax (if you sell the shares):
So, RSUs are indeed counted as salary income at vesting and taxed accordingly.
Best regards,
For detailed, personalized advice, consider a phone consultancy.
Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.
Thank you.
Shubham Goyal
Yes it will be treated as perquisite and shall be subject to TDS under the head salary irrespective of its vesting period. At the time of vesting once ESOP is allotted differential value will be subject to tax if any
Your tax liability will be around Rs 22 Lakhs. If you are a Resident and Ordinarily resident, your global income may also be included and you can get double taxation relief. In Singapore, the tax rates are less than the tax rates in India, So even if you claim double taxation relief, still you may additional tax liability. You may also need to ensure that tax is deducted by your employer properly.
The tax liability on your stock compensation depends upon the vesting and encashment.
Its important to have proper tax planning working with different scenarios.
RSUs are considered as perquisite which is taxable at the time of vesting. Further when RSU are sold, there shall be capital gains.
- Scope of total income and incidence of tax depends on the residential status of an individual during the previous year
- To determine salary net in hand, breakup of salary is required and deductions out of it
- Assuming vesting conditions of RSU will be fulfilled in India, RSU will be taxable in India
- Determination of tax depends on your residential status, salary breakup and other income earned by you during the previous year
To estimate your take-home pay and understand the tax implications for your base pay and stock compensation in India, here's a general breakdown:
1. Taxable Income Calculation
Base Pay: ₹71,00,000
Stock Compensation: ₹30,00,000
Stock compensation is typically taxed as part of your income in the year it vests. Here’s how you can calculate the tax:
2. Income Tax Calculation
Taxable Income: ₹71,00,000 + ₹30,00,000 = ₹1,01,00,000
3. Income Tax Slabs for FY 2024-25 (Old Regime)
Assuming you are opting for the old tax regime with deductions:
Calculation:
Total Tax Before Cess:
Add:
Total Tax Payable:
4. Deductions and Exemptions
If you are eligible for deductions under sections like 80C (up to ₹1,50,000), 80D, etc., you can reduce your taxable income. Assuming you claim ₹1,50,000 under 80C:
Revised Taxable Income:
Revised Tax Calculation:
Total Tax Before Cess:
Add:
Total Tax Payable:
5. Net Take-Home Pay
Annual Gross Income: ₹1,01,00,000
Less: Tax Payable: ₹29,09,400
Net Income: ₹1,01,00,000 - ₹29,09,400 = ₹71,90,600
6. Stock Compensation
Summary
This calculation assumes no other deductions or exemptions and follows the old tax regime. The new tax regime has different slabs and may impact your overall tax liability.