International taxation - esop
This query is : Resolved
Hari Singh
(Querist)
03 August 2021
An Indian employee working in India of an IT company headquartered in California USA .
In March 2021 he availed the ESOP facility and bought unlisted common stock of the company and paid in USD for the shares .
Now , the shares are being sold to a US citizen / Company based out of US though secondary market wherein the secondary market will charge commission and legal fee.
Another form was submitted to the buyer , being a tax form of US state , asking not to deduct tax before making the payment ; I.e full remittance to be made to the seller - Indian employee
1 . What would be the tax treatment in India ?
2. Is there any liability / obligation for tax to be paid in USA on the profit made in the transaction ?
In March 2021 he availed the ESOP facility and bought unlisted common stock of the company and paid in USD for the shares .
Now , the shares are being sold to a US citizen / Company based out of US though secondary market wherein the secondary market will charge commission and legal fee.
Another form was submitted to the buyer , being a tax form of US state , asking not to deduct tax before making the payment ; I.e full remittance to be made to the seller - Indian employee
1 . What would be the tax treatment in India ?
2. Is there any liability / obligation for tax to be paid in USA on the profit made in the transaction ?
CA R SEETHARAMAN
(Expert)
03 August 2021
1 It will be considered as short term capital gains and taxed in india.
2 No tax payable in U S on this transaction.
2 No tax payable in U S on this transaction.
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