Full formBusiness & Corporate
RSUstands forRestricted Stock Unit
Full Form of RSU
What is RSU?
Restricted Stock Units, commonly known as RSUs, are a form of equity-based compensation that companies offer to their employees as part of their overall salary package. Unlike traditional stock options, RSUs give employees actual shares of company stock once specific vesting conditions are fulfilled, such as completing a certain tenure or achieving performance milestones. In India, RSUs have gained significant traction over the past decade, especially among multinational corporations, Indian IT giants like Tata Consultancy Services, Infosys, and Wipro, and the rapidly growing startup ecosystem centred in Bengaluru, Hyderabad, and Gurugram. The value of these units is tied directly to the company's share price, making them an attractive long-term wealth-building tool for employees. They are typically taxed as perquisites at the time of vesting under Indian income tax laws. For students and professionals preparing for competitive exams, banking recruitment, or finance certifications, understanding RSUs has become essential knowledge given the increasing prevalence of such compensation structures in the Indian corporate landscape.
RSU का फुल फॉर्म
प्रतिबंधित स्टॉक यूनिट
Example
After joining her new role at a Bengaluru-based tech startup, Priya was pleased to discover that her compensation package included RSUs worth ₹15 lakhs vesting over four years.
RSU — frequently asked questions
What is the full form of RSU?
RSU stands for Restricted Stock Unit, a form of equity-based compensation where companies grant employees shares that vest over a specific period of time.
How are RSUs taxed in India?
RSUs in India are taxed as perquisites at the time of vesting, and the value is added to the employee's salary and taxed according to their applicable income tax slab.
What is the difference between RSU and ESOP?
While both are forms of equity compensation, RSUs give actual shares upon vesting without requiring any purchase, whereas ESOPs give employees the right to buy shares at a predetermined price.