Say you have ESOPs in a company. Once the company goes public, is there a holding period applicable for the esop before which it can not be sold? Like 1 month/3 months/6 months holding periods?
Can someone also explain how the conversion of ESOPs to RSUs happens after IPO?
And mainly, tax implications and how to save tax?
6-12 months lock-in on employee stocks post ipo
31% tax deduction while being transferred to your dmat account — this will be treated as other income and will be taxed at your overall tax bracket so you can get refund if you don’t fall under 30% bracket
LTCG/STCG depending on when you sell the stocks in open market
There are ways to save capital gains tax but nothing special to save the flat 31% tax deduction on other income.
Refer a CA for these questions
Primarily, my question targets startups which went ipo where you may joined when it was a private company and later it went public and you liquidates it.
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What happens to unexercised ESOP after IPO? I got to know that ESOP gets taxed at the time of exercise so it could lead to a huge financial burden. Also, is it possible to defer taxes after exercising of esops?
I am at a VC backed early stage startup. Have been offered Esops.l but have no clue on this. Can somebody explain to me how can I make money from ESOP by answering these-
