What is the tax treatment on granting, vesting and exercise of ESOPs and sale of shares resulting therefrom?
No perquisite tax is attracted on the grant, vesting and exercise of the stock options provided the stock option scheme/plan framed by the employer is in conformity with the guidelines issued by the CBDT for this purpose. In effect such scheme enjoys single point taxation as tax is levied only on capital gains on sale of the shares. In all other cases, perquisite is charged at the time of exercise of shares on the value of the shares granted by the employer. On subsequent sale of such shares, the perquisite value so charged will be deemed as the cost of acquisition.
