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What are the tax implications on ESOP?

By IndianMoney , 1 year ago

* When options are excercised by the employees, the difference between the market value and excercise value of shares will be taxed according to the tax bracket of the employee. * Selling of shares by employees are considered as capital gains. if they are sold within 1 year, then 15% tax is levied. if it is sold after a year, then it considered as long term capital gains are are tax exempt. *If a person has ESOP in a foreign country, when shares are sold, it will be considered as short term capital gains and will be added to the income of the employee. As per the tax brackets of the employee, this income will be taxed. * if capital gains are long term, then 10% tax will be levied without the benefit of taxation or 20% will be levied with the benefit of indexation.

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