| Question And Answer | |
|---|---|
| Subject: | Sale of Shares received as ESOPS |
| Category: | Income-Tax |
| Querist: | ANKUR AGRAWAL |
| Answered by: | Research Team |
| Tags: | Capital Gains, ESOP, Sale of Shares received as ESOPS |
| Date: | September 10, 2023 |
Amount received on sale of shares received as ESOPS will be taxed as capital gain or any other head?
If Capital Gain then what exemptions/deduction are available under sub sections of 54. Except 54F.
Important points (1) Shares are of unlisted company (2) More than 24 months old (3) No amount paid during exercise of option.
Amount received on sale of ESOPS will be taxed under the head ‘Capital Gains’. If the unlisted shares are held for more than 24 months from the date of allotment of shares, it will be taxed as long-term capital gain (along with benefit of indexation) and if sold within 24 months from the date of allotment of shares, the same shall be taxed as short-term capital gain. The querist will not be able to avail the benefits of sub sections 54 of the Income tax Act, 1961 , however benefit of section 54 F is available subject to other conditions .Refer Kamlesh Bahedia v. ACIT (2015) 151 ITD 495 / 169 TTJ 68 (Delhi)(Trib.) wherein the Tribunal held that; Rights to purchase shares under ESOP is a capital asset and he transferred said right within 36 months of offer, period of holding of right in question being less than 36 months gain arising from transfer of said right was to be assessed as short term capital gain