30% perquisite tax on EOSP

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munesh nigam (Querist)
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18 January 2024 Need input on income tax calculation as my company allotted me ESOPS after deducting 30%
as i already vested my share and amount i got is again taxable in my income? or i can exempt the amount as tax is already paid while vesting the shares?
any input on my query will be helpful.

Thanks in Advance
Munesh

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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19 January 2024 When an employee exercises the stock option i.e. agrees to buy the shares, it is a taxable income. The shares are credited to a Demat Account of an employee once shares are purchased. Here is the tax treatment for tax on purchase of shares under ESOP:

The exercise of stock option is treated as a Perquisite under the income head ‘Salary’
Perquisite amount is the difference between FMV as on exercise date and exercise price.
Perquisite will be taxed in the year in which the employee exercises the ESOP
The employer will deduct TDS on such amount and issue Form 16 to the employee
The employee must report it as Salary Income in the ITR, claim TDS Credit and pay tax on such income at slab rates.

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