Esops FBT: Vesting day average to be used for valuation

NEW DELHI: Taxmen are narrowing down their choices from their stock of options on finding the right price for taxing Esops. The employee stock option plan (Esop) valuation norms for listed companies are likely to rely on the opening and closing price of the scrip on the day Esop vests with the employee. If the stock has not witnessed any trading that day, the last traded prices could be used as the fair market value (FMV). The fringe benefit tax (FBT) would be levied on the difference between the price at which the employee gets the option and FMV.The date of vesting of Esop will be the point of valuation and its exercise date will be the point of taxability. Read More