Only such proportion of the ESOP perquisite as is relatable to the service rendered by the Employee in India is taxable in India.

Last updated: 23 January 2021

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The Income Tax Appellate Tribunal has ruled that only the portion of Employee Stock Option Plan (ESOP) benefits that relates to services rendered by an employee in India is taxable in India. This decision applies to assessment years 2013-14 and 2014-15. The tribunal considered appeals concerning the taxability of ESOP perquisites and relief under the India-UAE Double Taxation Avoidance Agreement.

Court :
ITAT Mumbai

Brief :
These two appeals pertain to the same assessee, involve a common issue regarding taxation of ESOP benefit and were heard together. All the relevant material facts are admittedly the same, except for a variation in the quantum of ESOP benefits brought to tax- while the the amount of ESOP benefit in question, in dispute, for the assessment year 2013-14 is Rs 72,77,320, the quantum of ESOP benefit for the assessment year 2014-15 is Rs 83,59, 125. We will take up the appeal of the assessee for the assessment year 2013-14 first, and whatever we decide in the said appeal, as learned representatives agree, will apply mutatis mutandis 2014-15 as well. The said appeal calls into question the correctness of the order dated 19th January 2018, passed by the learned C.I.T.

Citation :
ITA 1201/MUM/2018

Daily Limit Reached