Granted 1,100 ESOP in US company in US vested after 3 yrs in Jan 2005. In July 2008 I exercised (sold) 886 of these options and from the money in USD I got (difference in Market price & grant price), I immediately fully acquired the remaining 214 option shares (by paying grant price to the company) which are now with US brokerage in my name. I am an Indian Resident. As no money was either received by me in India and I used all the accrued USD to partly purchase my option shares -- Do I have any tax liability in India? and how much?
Ours is a closely held unlisted private limited company in India. We want to go for ESOP. 1. Is there any cap on the percentage of shares/share capital that can be offered under ESOP? 2. Is there any cap on the total number of share holders, after ESOP to still continue as a private limited company?
We are a closely held, unlisted private limited company in India and extend ESOP to select employees. Is there any cap about the maximum % of shares/share capital that can be doled out by ESOP? After ESOP, is there a cap on the total number of shareholders to continue to be a private company?
My company is listed in US and I am a resident Indian. I have been given ESOPs by my employer currently vested. Need to know if I can save tax on hte capital gain on sale of shares of co. listed abroad. If so then how and what reference can I find in the IT laws for the same. Please elaborate on indexation and saving tax through investment in property. Thanks
RE:Tax on ESOP sale
by JAYACHITRA JAYACHANDRAN on Feb 06, 2007 05:04 PM Permalink
Hello , I too have the similar question...can you please post the answer , if you have any frm your friends circle..
Under Sec 47 Gift of shares allotted under ESOP is not exempt as a transfer (i.e. the gift is a transfer).
Under Sec 48 For computing Cap Gains on Gift of shares alotted under ESOP, market value will be taken as consideration for such transfer.
Thus if assessee gifts the ESOP with 1 yr from allotment the assessee is liable for tax at the time of Gift for (Short Term Cap Gain = Mkt Value - Excercise Price). If gift is after 1 year since long-term no cap-gains tax.
The above is based on my limited understanding...this ammendment came in Yr 2001... surprising an article in 2005 still doesnt provide for it.
As per your article it is clear that a person selling his ESOP, shares of which are listed abroad should pay only 20% as long term capital gain tax. Is there any more stipulations around this? Do I need to buy the shares by paying money and then sell it to get taxed only @20%? What is all that I need to do to get taxed @20%, not @ 33%.Please provide me comprehensive details around this.
RE:ESOP Long term taxation
by sanjay sanjay on Feb 09, 2007 03:38 PM Permalink
Yes. You need to BUY the shares to get taxed at 20%. If these shares are "AWARDED" to you by your company, it will be treat like any award money you get @33%. Unfortunately, you cant do anything to make it 20%
