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



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Deepak Abbot

Deepak Abbot

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