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 VAT and GST in India :: VAT Audit :: TDS :: cpt :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: empanelment :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: VAT RATES
 
 
News Headlines »
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act
 Have you got interest on your income tax refund?
 New income tax rules to curb unaccounted cash

FBT cutoff: Esops get April Fool's Day surprise
April, 23rd 2007

Companies hoping to escape the fringe benefit tax (FBT) on employee stock option plans (Esop) by allotting shares to their employees ahead of the government notification are in for a rude shock.

The tax will be applicable from April 1, 2007, and, therefore, companies that have allotted shares under the head to employees after March 31, 2007, will be liable to pay the tax.

However, if the allotment was carried out before April 1, the companies manage to escape the tax. A host of companies - including Bharti Airtel, Moser Baer, Ranbaxy Laboratories, IL&FS Investments and Astra Microwave Products - have allotted shares to employees against Esops after March 31. However, some companies have been smart and timed the allotment of shares well before April 1, 2007.

After the passage of Finance Bill, 2007, the provision with regard to levy of FBT on Esops will come into effect from April 1, 2007, an official said. Although the government will issue a circular to give the guidelines on valuations after that, the provision will come into effect from that date itself.

The government is likely to come out with a circular to give guidelines to field formations to levy FBT on Esops. The valuation norms in case of listed companies will be based on Sebi rules while in the case of unlisted companies, the Central Board of Direct Taxes may give a separate set of rules.

In a typical Esop, employees are first given the options that vest with the employee for a certain period. After the period is over, the employee can exercise the option and acquire shares against it. He/she can then sell or hold the shares.

The employee, however, cannot sell or transfer the options during the vesting period. Most companies allotted shares against the options given to their employees before March 31, 2007, to escape the FBT.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Experience

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