Tech professionals moving between India and the US frequently hold RSUs or participate in an ESPP through a US employer, and the tax treatment genuinely differs by country and by event. In India, RSUs are treated as a perquisite: the fair market value at vesting is taxed as salary income, and the Indian employer is required to deduct TDS on that value even though the shares came from a foreign parent company.
Where double taxation creeps in
If the same RSU vesting is also taxed in the US -- for example because the US employer withholds at vesting under US rules -- the same economic event can be taxed twice unless relief is actively claimed. The India-US DTAA generally allows a foreign tax credit for US tax paid on the same income, claimed through Form 67, but that credit has to be affirmatively claimed; it isn't applied automatically.
ESPP shares add a second layer: US tax rules split the eventual gain into an ordinary-income component and a capital-gain component depending on the holding period at sale, while the India side only becomes relevant once the person is an Indian tax resident, at which point the same shares' subsequent sale is separately subject to Indian capital gains rules.
A relevant timing consideration
For someone returning to India who qualifies for RNOR (Resident but Not Ordinarily Resident) status, foreign-sourced income is generally not taxable in India during the RNOR period -- which makes the timing of RSU vests and ESPP sales relative to that RNOR window a genuinely material planning question, not just a compliance afterthought. This is a case where the interaction between employer withholding, DTAA credit claims, and RNOR timing is specific enough to warrant a preparer familiar with both sides.