Employees exercising their ESOPs should know how a recent ITAT ruling will determine whether the benefit is taxed as perquisite or capital gains
The Income Tax Appellate Tribunal ruled that repurchased stock options should be taxed as capital gains rather than perquisites. This decision clarifies the tax implications for employees exercising their Employee Stock Ownership Plans (ESOPs), which could benefit employees and startups. Stakeholders should consider this ruling when structuring ESOPs moving forward.