Three dates. Three different things. Getting them confused is one of the most common sources of errors in RSU tax filings — and one of the easiest to prevent.
Grant Date
The grant date is when the company formally awards you the RSUs. It's the date on the grant letter. It's the date the vesting schedule starts counting from.
Nothing taxable happens on the grant date. You don't own shares. You don't have income. You have a promise — and a clock that starts ticking.
The grant date matters primarily as the reference point for your vesting schedule (e.g., "your RSUs vest over four years from the grant date, with a one-year cliff") and, in some cases, for determining the FMV used in ESOP-related calculations.
For RSUs specifically, the grant date has no tax consequence.
Vest Date
The vest date is when the RSUs convert into actual shares and land in your brokerage account. This is the most important date in your RSU timeline.
Two things happen on the vest date: 1. You become an owner of the shares. 2. The first tax event is triggered: the FMV on this date is added to your taxable salary.
The vest date is also when your holding period begins — relevant for the 24-month LTCG/STCG calculation.
For employees with quarterly vesting, there are four vest dates per year, each potentially at a different stock price. For monthly vesters (like Googlers), there are twelve.
Exercise Date
This date is relevant for ESOPs, not RSUs. With an ESOP, you hold the option but must actively choose to exercise it — to actually buy the shares at the strike price. The exercise date is when that transaction happens.
For RSUs, there is no exercise. The shares are delivered automatically on the vest date. You don't have to do anything. There's no exercise date for RSUs.
The confusion arises because ESOPs and RSUs are often discussed together, and people who have previously held ESOPs sometimes look for an "exercise" step in the RSU process. It doesn't exist.
Settlement Date
Settlement is when the shares are actually credited to your brokerage account after a vest. In most US equity programs, this is T+1 or T+2 — one or two business days after the vest date.
This rarely matters for tax purposes, because tax is calculated based on the vest date FMV, not the settlement date price. But if you're looking at your brokerage account on a vest date and the shares haven't appeared yet, it's usually because of the settlement delay.
Sale Date
The sale date is when you actually sell shares in the open market. This triggers the second tax event: capital gains (or losses) on the difference between the sale price and the vest-day FMV.
The holding period for LTCG/STCG purposes runs from the vest date to the sale date — not from the grant date.
📊 TABLE: "Five Dates in Your RSU Life — What Each One Means" [Insert here: 5-row table] Date | What happens | Tax consequence Grant date | Company promises you shares. Vesting clock starts. | None Vest date | Shares delivered to your account. You become a shareholder. | Perquisite income: FMV × shares taxed as salary Settlement date | Shares appear in brokerage (T+1/T+2 after vest) | None (tax is based on vest date) Sale date | You sell shares in the market | Capital gains: Sale price − vest-day FMV — | — | STCG (< 24 months from vest): slab rate — | — | LTCG (> 24 months from vest): 12.5%
The Filing Error This Confusion Creates
The most common error: using the grant date as the start of the holding period for LTCG.
If you vest on June 1, 2023, and sell on July 15, 2025, you've held the shares for 25 months from the vest date. You qualify for LTCG treatment.
If someone mistakenly uses the grant date (say, January 1, 2022) as the start, nothing changes in this example — but the error shows up when there's a question about whether the 24-month mark has been crossed.
The correct holding period is always vest date → sale date. Not grant date → sale date.
How Rovia Can Help
When we review your equity situation, one of the first things we do is map every lot in your account with its correct vest date, FMV, and current LTCG status. This eliminates the guesswork and ensures the tax calculations are based on the right dates.
Source: Section 49(2AA), Income Tax Act — holding period for RSUs starts at vest date: https://incometaxindia.gov.in
