« Top Headlines » Open DEMAT Account in 24 hrs  Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)  Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose  Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More  Government proposes to ease tax relief conditions for offshore funds  TallyPrime Connected Banking: Automating Banking and Accounting  ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update  ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide  Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers  Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It  ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes  Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs «  Smaller cities show more collections... ‘Classify ethanol as a declared good’... » Fringe benefit tax on stock options to hit MNC expats September, 27th 2007 The fringe benefit tax (FBT) on employee stock option plans (Esop) could hit expatriate employees of multinational companies as credit cannot be claimed against it under double taxation avoidance agreements (DTAA). Thus, expat employees of multinationals who have received stock options could end up paying tax twice: once as FBT and the second time as income tax in the homeland. This is because the government has allowed employers to pass on the cost to their employees. Otherwise, FBT has to be paid by employers. Most of the developed countries like the US and the UK treat stock options as a perk and tax it in the hands of the employee. MNCs who have issued stock options to expat employees located in India include Coke, Dell and Adobe. While some employers may be benevolent and pay FBT themselves, others may ask employees to bear the burden. Incidentally, none of the tax treaties recognise FBT. Thus, entities cannot claim credit against it in their homeland as they can do for income tax. Says Ernst & Young partner Amitabh Singh, "Expatriates who continue to be taxed residents in their home countries will be taxed there upon exercise. Imagine their plight if, at the same time, their Indian employers recover FBT payable in India. Since the FBT is not eligible for foreign tax credits, almost 50-60% of their gains, and that too notional gains, will be gone. I am sure many expatriates will reconsider their deputation to India if this is the case. I feel the government should consider issuing appropriate clarifications to allow such FBT recovery to be considered eligible for tax credits." According to existing provisions, FBT liability arises when an employee exercises the stock option given to him. FBT is applicable on all fringe benefits given by companies to their employees based in India. The country has opted for taxation of fringe benefits at the level of the employer as it makes collection easier. FBT on Esops has to be paid at the rate of 30%.