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ESOPs guidelines expected by Sep 14
September, 11th 2007
The finance ministry is expected to issue the fair market valuation guidelines for employees stock option plans (ESOPs) by Friday.
 
If the valuation norms are not announced by then, the due date for paying advance fringe benefit tax (FBT) on ESOPs is likely to be extended beyond September 15. It is to be noted that September 15 is the due date for paying advance tax for the second quarter of the current financial year.
 
Companies will be paying advance tax on ESOPs for the first quarter along with the second quarter as they have not paid the tax in the first quarter due to the absence of valuation norms.
 
The law ministry is vetting the proposed valuation method and is expected to clear it by Friday, a source familiar with the development said.
 
If it is not cleared by Friday, chances are that the notification may come in the subsequent week.
 
The valuation method could be a mix of the Securities Exchange Board of Indias prescribed method for the valuation of listed shares and wealth tax rules applicable for unlisted shares for the valuation purposes, said Govardhan Purohit, executive director, PricewaterhouseCoopers.
 
The companies are awaiting the finance ministrys word in this regard.
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