Employee benefit scheme tax treatment
This query is : Resolved
22 December 2023
The assessee is working in a MNC.
She opted for employee benefit scheme wherein she received cash proceeds instead of shares after the expiry of vesting period.
Contributions were made both by employer as well as the employee in the shares of such MNC during vesting period.
Scheme also included Restricted Share Units(RSUs)
What shall be the tax treatment during different phases under different schemes?
Will there be Capital gain as well?
Or the cash proceeds received is after deducting all form of tax? I.e. no liability of capital gain?
She opted for employee benefit scheme wherein she received cash proceeds instead of shares after the expiry of vesting period.
Contributions were made both by employer as well as the employee in the shares of such MNC during vesting period.
Scheme also included Restricted Share Units(RSUs)
What shall be the tax treatment during different phases under different schemes?
Will there be Capital gain as well?
Or the cash proceeds received is after deducting all form of tax? I.e. no liability of capital gain?
23 December 2023
RSUs are taxed as income to you when they vest. If you sell your shares immediately, there is no capital gain tax, and you only pay ordinary income taxes. If instead, the shares are held beyond the vesting date, any gain (or loss) is taxed as a capital gain (or loss).
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