ESOPs can be taxing for employees of unlisted companies

The tax imposed on buyback of shares and employee stock options is different

Sudipto Dey 

E-commerce major Flipkart recently approved buyback of $100 million in employee stock options (ESOPs) — a bonanza for its 6,000-odd current and former employees. However, before uncorking the champagne bottle, the employees need to figure the tax implications. In unlisted companies, the tax treatment for employees will vary, depending on whether the buyback relates to stock options or to shares issued by the company.  If company buys back stock options: Experts say that Section 46A of the Income Tax Act, 1961, specifically deals with tax implications in case of ...

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First Published: Sun, October 08 2017. 21:59 IST