Dear Experts,
I have one query regarding Tax appliacbility on ESOP exercised related to Unlisted Company ( i.e Holding Company -USA Inc . ) .
Stock options of Parent USA company is granted to Subsidiary-Indian employees . In case the employee from subsidiary comapany quits and later on exercise his ESOP option .
What is the tax applicability here . Whether Ex-employer has the obligation to deduct tax or Its Ex-employees responsibility to report such gains and pay tax
Thank You
specifically a holding company in the USA with subsidiary employees in India.
Here's a general overview: -
ESOPs granted to Indian employees are considered perquisites and are taxed as income. - When an employee quits and exercises their ESOP option later, the gain is considered income and is taxable. - The ex-employer (Indian subsidiary) may have an obligation to deduct tax at source (TDS) if the gain is considered income. -
The ex-employee is responsible for reporting the gain and paying tax on it. However, please consult a tax expert or chartered accountant for personalized advice, as tax laws and regulations can change. They can help you understand the specific tax implications and obligations in this scenario. Additionally, you may want to refer to the Income-tax Act, 1961, and consult the official website of the Income Tax Department of India for more information on tax applicability and TDS guidelines. Let me know if you have any further questions!
Thank You Sir for the reply.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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