FloatingBagel

ESOPs in ITR

I have worked in a startup which gave me ESOPs. I left the company and they have passed on to me my share of vested ESOPs in zenequity.

Do I need to mention this while filing ITR? Do I need to pay tax on it?

16mo ago

Find out if you are being paid fairly.Download Grapevine

PerkyHamster

Stealth16mo

Writing based on what I learnt and did. Would strongly recommend talking to CA.

Till you exercise, nothing to be done in ITR
At the time of exercise, pay tax based on notional profit. (FMV - exercise price). It is unfair but this is what the law states. Also note that fmv can be different from valuation at the time of fundraising.
if the company is registered outside of India, you now own foreign asset. You will have to declare it in ITR. You will also have to fill out 15 CA / Cb while remitting money abroad while exercising

FloatingBagel

Stealth16mo

Thanks a lot. How do I avail service from a CA?

PerkyHamster

Stealth16mo

Check any local CA or ask a colleague. Better to have someone via reference

TwirlySushi

Tiger Global16mo

No.

As long as you haven’t exercised any ESOPs there is nothing for you to report.

You only pay taxes and report when: you exercise (perquisite tax) and when you sell (capital gains).

Or if the company does a direct buy back then most likely you just end up paying perquisite then. You have nothing to worry about.

PS: I have spent years in this space.

Discover more

Curated from across

Personal Finance17mo

Tax filing ESOPs?

Do we need to declare ESOPs vested, have not exercised the option yet?

Indian Startups8mo

I’ve not exercised my ESOPs from my previous employer. I am waiting for the company to go public. I quit the company in 2021. What will my tax be if I exercise and sell my stocks at the time of IPO? How much tax can I save if I buy a pro...