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 property?
You will have two taxation points . When you exercise you will be taxed under the heads salary . This is based on your tax bracket after considering the difference between your exercise price and market value date of exercise. This will be added to your income as salary . Then depending upon the time you have held it you will be taxed under short term or long term capital gains when you sell it.
How can I get salary from ex-employer? I am technically no longer with the company so as per the income tax law, we no longer have N employee employer relationship
It’s a fair question . But tax laws work differently. Look at it like this. You get your f&f after a month or something two after you leave your job. This is not exactly similar but works like this. This benefit was conferred to you as an employee by your employer. So it is taxed as a salary from employer just received on a later date .
Will I necessarily have to pay tax on exercising it? The long term or short term capital gains tax will only take care of selling price - exercise price which would be the same in my case I believe
So say one has 100 ESOPs which a person exercised and converted to say 1000 shares in say Jan 2024
Now if IPO happens in aug 2024, what will be the long term capital gains tax rate for these shares.
Will the tax rate change if one sel...
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?
Hi, Say a Series B (US) funded startup gives me 3000 shares which are worth $5/share. It follows the usual vesting period of 4 years. Now assume 4 years have passed and all the 3000 shares are vested but the company hasn't gone IPO.
He...
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.
