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RT @sujit_bangar: Ramesh received ESOPs from his startup. But when it came to taxes and ITR reporting and taxes - he was lost. Indian sta….

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[10] Final Tips for ESOP Reporting. 🔸 Check Form 16 → Perquisite income.🔸 Check AIS → Sale value.🔸Cross-check ITR → Salary + Capital Gains.🔸 Use ITR-2 or ITR-3.🔸 Mention deferred tax if eligible Startup. Even 1 mistake = scrutiny risk.

[9] Foreign ESOPs? Don’t Miss This!. If your company is a foreign MNC and you receive ESOPs:. Must report in “Schedule FA” (Foreign Assets). ✅ Disclose: country, peak value, cost of acquisition, gains. Failure to do so can attract ₹10 lakhs penalties under Black Money Act.

[8] Where to report deferred tax in ITR?. In ITR-2 or ITR-3, under “Schedule Part B – TTI”:. → There's a separate section for deferred tax on ESOPs under Section 191(1A). Also report in:. → “Schedule Salary”.→ “Schedule FA” (if foreign ESOPs).

[7] Deferred Tax: When to Pay?. Instead of paying tax in year of exercise, tax is deferred until earliest of these:. 🔸 48 months from end of assessment year.🔸 Date of sale of shares.🔸 Date of leaving the company. Tax still applies - just postponed!.

[6] Special Provision for Startups. If your company is a DPIIT-recognised eligible startup (Sec 80IAC):. You can defer perquisite tax on ESOPs by up to 48 months!. But only if:.✅ You’re an employee of a startup.✅ The startup has approved 80IAC eligibility.Let’s understand 👇.

[5] How to report ESOPs in ITR?. 🔸 Perquisite income to be reported under “Salary”. 🔸 Capital Gains to be reported in “Schedule CG”. If your company is startup then you might these benefits👇.

Tax Rate (Unlisted):. 🔸 < 24 months = STCG = Slab Rate. 🔸 ≥ 24 months = LTCG = 12.5% w/o indexation.

[4] Stage 3: Sale - Capital Gains. Let’s say you sell the shares at ₹250 in Dec. 🔸 Cost = FMV on exercise date = ₹200. 🔸 Sale = ₹250. 🔸 Capital Gain = ₹50 per share.

[3] Stage 2: Exercise - Salary Tax. In March 2024 your company turned profitable so you exercised them when FMV = ₹200. 🔸 ₹190 per share is considered perquisite income. 🔸 ₹1.9 lakh (190×1,000) gets taxed as salary in that FY. It’s reported in Form 16.

[2] Stage 1: Grant - No taxation and no reporting . Suppose your company grants you 1,000 ESOPs at ₹10 in January 2023. You can exercise them if your company turns profitable by March 2024.

[1] From grant to exercise ESOP has 3 stages however, Taxation happens at 2 stages only:. 🔸Grant - No tax is levied . 🔸Exercise - taxed as perquisite under salary. 🔸Sale - taxed as capital gain based on sale vs FMV price. Let’s break both down with an example 👇.

Ramesh received ESOPs from his startup. But when it came to taxes and ITR reporting and taxes - he was lost. Indian startup employees made ₹1,252 crores in 2024 from ESOP buybacks. Here’s a simplified guide to understanding ESOP taxation and ITR reporting 🧵👇

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RT @TaxBuddy1: An NRI sold his Mumbai flat for ₹2 Cr. Deducted TDS on ₹1 Cr gains. Filed ITR. Weeks later, a scrutiny notice lands in his….