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: empanelment :: articles on VAT and GST in India :: due date for vat payment :: list of goods taxed at 4% :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: form 3cd :: Central Excise rule to resale the machines to a new company :: TDS :: ACCOUNTING STANDARD :: VAT RATES
 
 
« News Headlines »
 CBDT simplifies ITR filing process from FY18
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj

FBT on Esops likely to be based on asset valuation norms
June, 07th 2007

The finance ministry is likely to use the asset valuation norms to arrive at the fair market value of shares to calculate the fringe benefit tax on employee stock options (Esops). These norms are used by the income tax department to estimate the net worth of a business,Going by the Wealth Tax Act, the net value of the assets of a company is arrived at by dividing the networth of the company by the number of shares issued.
 
This valuation norm can be used both for listed as well as unlisted companies to arrive at the fair market value for giving Esops. While the market value may vary a bit, the method will give a fair idea of the stock price and will not be less than this, a finance ministry official said

Using this method, FBT can be levied on the difference between the fair market value of a stock on the date of vesting an option and the cost of the stock options for the employee. The date on which they are exercised would be the point of taxability and valuation would be done on the day the options are vested with the employee.

Fair Share
This valuation norm can be used both for listed as well as unlisted companies to arrive at the fair market value for giving Esops
With this, FBT can be levied on the difference between the fair market value of a stock on the date of vesting an option and the cost of the stock option
 
Tax experts, too, agree. Divya Baweja, partner, BMR & Co said: This is one of the ways that can be used to arrive at the fair market value of Esops. The finance ministry may decide to give a few options for calculating the value. Companies, especially unlisted ones, can get a valuation certificate specifying the method used.

Finance minister P Chidambaram had mooted the proposal to bring Esops under FBT. However, the Central Board of Direct taxes is yet to come out with a circular defining the method to arrive at the fair market value. At present, the CBDT is exploring various methodologies such as guidelines issued by the Securities and Exchange Board of India and the Black and the Scholes method to arrive at a possible solution.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Desktop Application Development Outsourcing Desktop Application Development Offshore Desk

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