Employees exercising their ESOPs should know how a recent ITAT ruling will determine whether the benefit is taxed as perquisite or capital gains

In Benjamin Franklin’s famous words, nothing is certain except death and taxes. While the above statement remains factually correct, some might argue that for taxes, while the certainty remains of being taxed, the quantum remains uncertain.

A recent Income Tax Appellate Tribunal (ITAT) decision involving taxation of ESOPs has brought some relief and clarity on this aspect, and which should find favour with employees, start-ups, promoters and other stakeholders.