ESOP

If the Employees’ Stock Option plan or scheme is in accordance with the guidelines issued by the Central Government, no perquisite value on account of stock option would be considered for taxation as perquisite under section 17(2) of the Income-tax Act, 1961 as it stood at the relevant time and vice versa.

Amendment of section 17(2): With the withdrawal of fringe benefit tax, the incidence of tax on employees will be more from assessment year 2010-11. Section 17(2) shall be widened by three more clauses viz. clauses (vi), (vii) and (viii).

Visit the below site for some guidelines under SEBI for ESOP.

https://www.sebi.gov.in/guide/guide9.html