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Tax incidence of ESOP on company

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(Querist)
23 May 2008 Is the expenditure recorded in books of the company at the thime of grant of options (Market Price - Exercise Price)is a tax deductible expenditure ?

If yes then at wht point of time

1. At the time of grant or
2. At the time of exercise of options?

If no, then is there any CBDT circular , ITAT ruling to that effect? Pls give details / refernce.
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Manish Agarwal

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Manish Agarwal (Expert)
24 May 2008 Hi Anmol,

Under the Income Tax Act there is no concept of notional expenditure. Sec.37 of the Act allows expenditure only when it has been actually incurred. So there is no question of allowing such expenditure.
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