12 May 2011
Kindly explain the provisions of taxabilty in the Hand of Employee on ESOP issued by an unlisted Company? How the perquisites will be deceided at the time of excecise of option by an employee and how the long term and short term gain will be computed in such cases?
12 May 2011
For unlisted companies the FMV is decided by a merchant bankers on the specified date. Specified date may be date of exercise of the option or a date not more than 180 days before.
Capital Gains shall be computed by taking the perquisite value in that respect + any amount paid by the employee as cost of acquisition. For Long Term -More than 12months holding period is required. Indexation will be allowed in case of LTCG.