Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: articles on VAT and GST in India :: form 3cd :: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: empanelment :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: cpt :: VAT RATES
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

Esop FBT for unlisted cos likely on Sebi rules
March, 03rd 2007

The fringe benefit tax (FBT) on unlisted companies granting stock options to their employees is likely to be based on Sebi norms for valuation of shares in unlisted firms or the commonly accepted Wealth Tax rules.

In the 2007-08 Budget, the government has proposed levying FBT on the discount price of Esops. The discount price is the difference between the fair market value on the date when the employee exercises his stock option and the amount actually paid or recovered from the employee.

For instance, a listed company that allots shares to its employee under a stock option plan at, say, Rs 100, compared to the quoted value of Rs 1,200, will be liable to pay an FBT of 33.99% on Rs 1,100. The tax burden works out to close to Rs 374.

The valuation norms are well laid out for listed companies. But in the case of unlisted companies, the finance ministry will unveil norms separately. Two options are now being looked at. In both cases, the book value is the basis on which the share valuation is done.

Sebi rules relating to valuation of shares in unlisted firms say the computation should be based on the net worth per share divided by the number of paid-up shares. A similar computation is also done under the Wealth Tax rules. The new levy announced in this years Budget may prompt many companies to nudge their employees to exercise their stock options by March 31, 07, since the new provision kicks in from April 1.

In a stock option plan, the options are first granted to the employee. These vest with the employee for a period, say, four years. During this vesting period, the employee cannot transfer or sell the options. Once this period is over, the employee acquires the shares by exercising the option. After that, the choice is left to him to sell or hold the shares.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions