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Esops

kinnary (student) (231 Points)

18 May 2011

how are esops taxed nw??in case of non resident how is it taxed?

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suman (Auditor ) (388 Points)
Replied 18 May 2011

Any benefit from ESOPs would be taxed as a perquisite in the hands of the employee on the date of exercise, at the difference between the FMV of the shares on the date of exercising the options and the exercise price.

Any subsequent sale of shares by employees would trigger capital gains tax liability in the hands of the employee. For the purpose of computing capital gains, FMV on the date of exercise would form the cost basis.

The holding period of shares shall be reckoned from the date of allotment/ transfer of the security. If such shares are listed on the Indian stock exchange, long-term capital gains tax liability will be ‘Nil’.

if non resident is working for indian company than it will be taxed similalry.

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(Guest)

very rightly explained suman..

Harpreet (* * * * * *) (1670 Points)
Replied 18 May 2011

thanks for the information

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 18 May 2011

Originally posted by : suman
	Any benefit from ESOPs would be taxed as a perquisite in the hands of the employee on the date of exercise, at the difference between the FMV of the shares on the date of exercising the options and the exercise price. Any subsequent sale of shares by employees would trigger capital gains tax liability in the hands of the employee. For the purpose of computing capital gains, FMV on the date of exercise would form the cost basis. The holding period of shares shall be reckoned from the date of allotment/ transfer of the security. If such shares are listed on the Indian stock exchange, long-term capital gains tax liability will be ‘Nil’. if non resident is working for indian company than it will be taxed similalry.