Here are ESOP taxation reforms Budget 2022 missed

  • ESOP would still be double taxed on exercising and liquidation,
  • ESOP would still be taxed as per the income slab, where it could go up to 42.7 percent
  • Exercise ESOPs when they are vested. Pay the strike price, and take it to their demat account
  • Pay the tax on the difference between exercise price and FMV on that day
  • Keep ESOPs in the demat account for two years, and then sell if there is a secondary or buy back
  • only in this case tax is 23.9 percent (which was 28.5 percent earlier)
  • Tax ESOPs only on exercising, and
  • ESOPs should be taxed as per listed shares taxation which means 15 percent if sold in less than one year, and 10 percent if sold thereafter

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Deepak Abbot

Deepak Abbot

I write about Growth, Product & Analytics | Currently at indiagold | Earlier Product @Paytm