Calculation of TAX on ESOP

[bhavani prasad]

Dear friends

How do we calculate tax on ESOP?

What according to me is Employer pays the FBT and the employee remits the same to the Employee.

In turn if employee disposes his stocks off, does he need to pay anything on the sale i.e: ST-CG tax or LT-CG tax.

Please deliberate your views.

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CS Bhavani Prasad C N
Company Secretary

[Chethan Chandra Bhat]

there is no FBT from AY2010-11. nowon, ESOp is a perquisite in the hands of the employee.refer Perquisite valuation rules notified by the CBDT in October 2009.  Perquisite value is calculated as per those rules and are added to the salary of the employee. Pv will be value as computed as per these rules as reduced by the value that he has pay to acquire the right to exercise the option.

If the shares are transfered by the employee, then the PV + amount paid by him would be cost for the purposes of LTCG/STCG payable by the transferor.

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With Kind Regards,

Chethan Chandra Bhat
S1, Shivaji Supraja Apartments,
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