FX & Repatriation: Moving USD from RSUs to India (LRS, Costs, Options)

The FX leg is a tax in disguise

When you sell RSUs at Schwab, Morgan Stanley, E*TRADE, or Fidelity and wire the proceeds to your Indian bank account, two costs eat into the remit: a visible wire fee ($25–$35) that everyone sees, and an invisible FX spread (50–100 basis points) that almost no one notices. On large remittances, the invisible cost dominates by an order of magnitude.

A ₹1Cr remit at 80 bps of broker FX spread is ₹80,000 of friction. The same remit at the interbank rate is ₹0. There is no line item on your broker statement that says “FX cost: ₹80,000” — the spread is baked into the rate you accept when you submit the wire. It looks like exchange-rate noise. It is not. It is a structural tax.

Most engineers we work with had no idea this was happening until they ran the math themselves. This piece is the math: how much you are losing per remit, why, and the four operational paths to route around it. It is the technical companion to the Broker Transfer pillar.

1. LRS, finally clarified

The Liberalised Remittance Scheme (LRS), introduced by the RBI in 2004 and revised many times since, allows Indian residents to remit money out of India for permitted purposes — investment, education, gifts, travel, medical treatment — up to $250,000 per financial year per individual.

The word that almost everyone misses: outward. LRS governs how much you can send from India to abroad. It does not govern how much you can bring from abroad into India.

So when your Schwab account sells 100 GOOGL at $230 = $23,000 and you wire that to HDFC Bank, you are not consuming any LRS quota. You can do this every month, every quarter, for the rest of your life, without ever bumping the $250K ceiling — because the ceiling is on the other direction entirely.

What does kick in on inward wires: AML (anti-money-laundering) and FEMA (Foreign Exchange Management Act) source-of-funds checks. For wires above ~$10,000, your Indian bank will typically ask for:

• Broker statement showing the RSU sale (or salary credit, or whatever the source is)
• Copy of W-8BEN on file with the broker
• Purpose code — typically P0801 (personal remittance of income earned abroad), occasionally P0103 (salary) or P1499 (other private services) depending on classification
• FIRC (Foreign Inward Remittance Certificate) — issued by the bank after the wire clears; you should keep this with your tax records

This is documentation, not interrogation. The bank's compliance team needs the paperwork to log the wire correctly with the RBI's reporting system. Provide the documents and the funds clear in 1–3 business days. The lasting record — the FIRC — is what proves to the IT Department later that the wire was legitimate post-tax money, not unexplained income.

2. The FX channels available, by realistic spread

Once your RSUs are sold and the USD is sitting in your US brokerage account, you have five practical options to convert and move that money to India. They differ on three axes: FX spread (the big one), wire/transfer fee (small), and operational friction (medium).

The numbers above are typical ranges observed across recent customer remittances. They are not promises — broker FX spreads vary with market volatility, account tier, and remit size, and we have seen them widen during high-volatility days (e.g., FOMC announcement days, INR-stress days). On any single transaction, run the spread calculation yourself before initiating.

How to actually measure your spread

On the day you initiate the wire, note three numbers:

1. The interbank USD/INR mid-rate at that moment (XE.com, Google, or Bloomberg)
2. The rate your broker quoted when you confirmed the wire
3. The amount in USD you remitted

Then: spread (bps) = (interbank − broker rate) ÷ interbank × 10,000. Multiply spread × USD amount × interbank rate × 0.0001 for your INR cost. Do this once and you stop accepting bad rates by default.

3. The math — Priya's recurring remit

Same Priya from the RSU Taxation pillar and the Schedule FA pillar: Senior Software Engineer at Google Bengaluru, GOOGL RSUs vesting quarterly through Schwab Equity Awards. She has decided to sell 100 GOOGL each quarter post-vest, once the lots cross 24 months from vest date and qualify for LTCG.

On her Q1 2026 sale: 100 GOOGL at $230 close = $23,000 gross proceeds. Interbank USD/INR at the time of wire: ₹84.00. Hypothetical interbank-rate value of the remit: 100 × $230 × ₹84.00 = ₹19,32,000.

Same remit, four channels

On a single quarterly sale, the gap between Schwab's direct wire and a 0-markup channel is about ₹15,456 of avoidable cost. That is one number that disappears into nothing on a brokerage statement.

Now compound it. Priya sells four times a year for five years — 20 remittances. The cumulative friction:

Over five years, Priya leaves ₹3.1L on the table by defaulting to her broker's FX. That is real money — equivalent to a Goa vacation, a year of premium term insurance, or about 1.5 grams of gold added to her portfolio every quarter. None of it shows up as a line item she could have refused.

4. Wire fees versus spread — which dominates when

On small remits, the flat wire fee is the bigger cost. On large remits, the FX spread crushes the fee. The crossover sits between $5,000 and $10,000.

Wire fee landscape

Where the crossover lives

Wire fee is fixed; FX spread cost is proportional. So:

• A $2,000 remit at Schwab 80 bps spread: FX cost ~₹1,344, wire $25 (~₹2,100). Fee dominates.
• A $10,000 remit at the same 80 bps: FX cost ~₹6,720, wire ₹2,100. FX about 3× the fee.
• A $50,000 remit at the same spread: FX cost ~₹33,600, wire ₹2,100. FX is 16× the fee.

Practical consequence: do not split a large remit into many small ones to “manage” FX. You will pay the wire fee N times and the same proportional spread. Consolidate into 1–2 large wires per quarter (or whenever you cross a 24-month LTCG threshold for a meaningful lot) instead.

5. Timing — what to actually optimize

Engineers love to optimize. With RSU sales there are two timing variables — the share price and the FX rate — and they interact in ways that are easy to misread.

The two-variable trap

Your INR proceeds equal shares × USD price × USD/INR rate. A 2% rise in INR strength (rupee getting stronger, USD/INR falling) reduces your INR proceeds by ~2%, holding share price constant. A 2% rise in share price increases proceeds by ~2%, holding FX constant. The two move semi-independently.

Common mistakes:

• Selling at INR weakness to maximize INR proceeds. Sounds smart. But INR-weak periods often coincide with US dollar strength, which often coincides with US tech sell-offs. You may sell the same shares for fewer dollars at a better INR rate — net could be either direction.
• Waiting for “INR ₹86” to convert. The FX is the smaller variable for most US tech RSUs — share price moves of ±20% in a year dwarf FX moves of ±3–5%. Optimizing the smaller variable while the larger one drifts costs more than it saves.
• Selling at a market dip AND an INR-strong day. The compounded cost is real. If GOOGL is down 5% and INR is up 2%, your INR proceeds are down ~7% on a position you would not have sold otherwise.

The decisions that actually matter

Rank-ordered by INR impact for a typical Indian-resident RSU holder:

1. STCG vs LTCG (24-month clock). ~21 percentage point tax differential. Single largest INR-mover. Covered in RSU Taxation pillar.
2. Diversification / concentration risk. On a 50% market drawdown of a concentrated single-stock position, no amount of FX optimization recovers the loss.
3. FX spread (0 vs 80 bps). 80 bps on a ₹50L remit is ₹40,000 of avoidable cost per transaction. Compounding.
4. FX rate timing. Last in line. Try not to actively sell into both a market dip and an INR-strong week, but do not delay an otherwise-correct sell decision waiting for a 2% FX move.

6. Tax treatment of the wire itself

Important: the inward remittance is not a taxable event. Bringing your own post-tax USD into India in INR is not income. The taxable events are:

• The perquisite tax at vest (already paid via your Indian payroll TDS or sell-to-cover).
• The capital gain on the underlying sale (STCG or LTCG, computed in INR at the vest-day RBI TT rate as cost basis vs sale-day rate as proceeds).
• Any dividend that may have accrued (separate Form 67 question — covered briefly in RSU Taxation pillar).

The wire is the mechanical conveyance after the taxable event has already occurred. The IT Department does not tax the same dollars twice — once as capital gain, once as inward remittance — but they do want to be able to reconcile the inward wire against a disclosed underlying sale. Keep the FIRC and the broker sale confirmation together.

The AML conversation, demystified

For inward wires above ~$10,000, your Indian bank will likely email or call within 24–48 hours asking for documentation. This is routine compliance triggered by RBI's reporting framework, not a flag on your account. The questionnaire typically asks:

• Source of funds (RSU sale at US employer broker)
• Relationship with the foreign remitter (the broker, on your behalf)
• Purpose code (P0801 for income earned abroad — RSU sale fits here)
• Supporting documents (broker statement, W-8BEN copy)

Respond promptly with the documents and the funds clear in 1–3 days. The bank then issues a FIRC (Foreign Inward Remittance Certificate) — keep this. It is your defensible record that the inward wire was legitimate post-tax money, useful both during ITR filing and if a Section 148 notice ever queries the deposit.

7. Schedule FA — sold-and-remitted lots still appear

A common mental shortcut: I sold my RSU, wired it to India, so the position is “closed” — nothing to disclose. Wrong.

Schedule FA is a holding-during-the-period disclosure, not a year-end snapshot. If you held the lot at any point between Jan 1 and Dec 31 of the relevant calendar year, it goes in Table A3 — even if you sold it on January 5 and wired the proceeds the same week. The row in A3 for that lot will show:

• Initial value: INR cost basis at vest-day RBI TT rate
• Peak value: peak INR value during the holding window (Jan 1 to sale date)
• Closing value: ₹0 (you no longer hold it on Dec 31)
• Gross sale proceeds: INR proceeds at sale-day rate

And the inward wire of the USD proceeds is reflected in your Indian bank balance — which feeds into Schedule AL if your total assets cross ₹1Cr. The remittance does not erase the underlying foreign-asset disclosure obligation. The Schedule FA pillar covers the row-by-row mechanics.

8. What Rovia does about the FX leg

The structural problem with broker FX is that the spread is built into the rate you accept; there is no “decline FX, take wire only” toggle in Schwab's portal. Rovia exists, in large part, to give Indian-resident RSU holders the option that should have existed by default.

• 0-markup FX channel. Where Rovia handles the sale-and-remit, USD-to-INR conversion executes at the interbank mid-rate. You pay the wire fee, nothing else. No hidden spread.
• Smart routing. For each remit, the platform selects the cheapest end-to-end channel given the amount, urgency, and destination bank — institutional FX desks for large transactions, faster rails for small ones.
• Lot-level cost basis preserved through repatriation. Each sale is tagged back to its source vest lot at the vest-day RBI TT rate. INR cost basis carries through to your Schedule CG and Schedule FA outputs automatically — no manual reconciliation between broker statements and RBI's historical rates page.
• FIRC + tax-pack output. After each remit, the platform aggregates the broker confirmation, the wire receipt, and the FIRC into a single bundle you can hand to your CA or upload to your ITR filing — including the purpose-code mapping for FEMA compliance.
• Spread visibility for non-Rovia channels. Even when you wire directly from Schwab or Morgan Stanley, Rovia computes and shows what spread you actually paid versus interbank, so you can see the FX cost as a line item retroactively. Visibility alone changes behavior.

Frequently asked questions

Last reviewed June 1, 2026. FX spreads and wire fees change frequently — verify on your broker's current site before initiating any remittance. LRS limits and FEMA rules quoted reflect RBI guidance as applicable in mid-2026. This article is informational and not personalised tax or financial advice — your specific position should be reviewed by a qualified chartered accountant or FEMA-aware advisor.