With respect to stock options issued, because you are a resident in India and are also receiving the options in India,  a benefit is arising to you in India being the difference between the Fair Market Value (FMV) on the date on which the option is exercised less the any amount being actually paid or recovered from you. This benefit would be subject to tax as part of 'salary income' being in the nature of a 'perquisite' provided by the employer and tax will be deducted by the employer in India (though they are stock options of the US Company). In the event of sale/transfer of shares, the transaction takes the course of you selling your property. Hence, the difference between the sales consideration of your stocks and the fair market value on the date of exercise would be treated as capital gains and subject to capital gains tax. The capital gains could be long term or short term, depending upon the period of holding of such shares/securities.Hope the above clarified. Regards, CA Aditi Bhardwajaditi.bhardwaj@outlook.com