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Tax libility under approved ESOP scheme

Tax queries 1308 views 5 replies

Dear friends Good Morning,

My question to you that, My company offering me ESOP , Scheme  is duly approved, ESOPs are taxable at the time of transfer under capital gain head ,but my Concern is that now as we know that FBT is no More, So if i accepted the offer , wheter it should be part of my income as consider as perquisites under head salary Income or not.?

Kindly reply.

Replies (5)

Dear Arun,

Yes u r rite that with the abolition of FBT, the difference in the following two prices will be considered as perks and added in ur salary -

1) FMV of the share on the date of "Exercising the option to buy shares"

2) Price paid to employer as a cost of shares

Dear Amir Thax for reply.......

But i like to ask further that at the time of accepting offer my company not asking for any payment from my side, but I need to hold for 1 yr before transfering them. So in this case what is the amount taxable under salary  AY 2010-11,if company alloted me 100 shares  ( @ 300/-) on discount Rs.150/- i can sell only 20% in each yrs.

Dear Arun,

Since Co. is giving u discount of Rs. 150/share so this amount necomes ur benefit/perquisite & will be taxable as salary i:e Rs. 15,000/-

Now when u will sell these shares the cost that is to be taken for computing gains will be Rs. 300 & not Rs. 150/- since the amount of discount has already been taxed as perquisite in the form of salary..

I fully agree with Amir

please follow this link...

https://www.caclubindia.com/forum/make-esops-more-employee-friendly-69942.asp


CCI Pro

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