LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

EMPLOYEE STOCK OPTION TAXATION FOR STARTUPS

VIPINKUMAR K TIWARI (Financial Professional) (196 Points)

05 February 2020

As per Budget Announcement 2020-2021 : In the case of startups, employees possessing Employee Stock Option Plans (ESOPs) may defer paying taxes up to five years from the time of exercise, till the time they leave the startup, or until they sell their shares, whichever is earlier.

Is it exempt for that period or taxable for span of five years please clarify???

Reply
Follow
Share

1 Replies

Monu Prajapati (45 Points)
Replied 05 February 2020

as per budget 2020-21 the change in taxability of ESOP is defer the tax means you have to pay tax later not on date of transfer so you can say that it is deferment not exemption, still you have an option to pay it later as in your query it is written, up to five years from the time of exercise, till the time they leave the startup, or until they sell their shares, whichever is earlier.