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The Economic Times
The Economic Times
Neelanjit Das

UK based employee sold ESOP worth Rs 26 lakh, declared Rs 1 lakh short-term capital loss, Income Tax dept treated it as unexplained gains; He fights and wins case in ITAT Mumbai

ITAT Mumbai ESOP ITAT India Income Tax United Kingdom AO Suresh Surana LT Infotech the Income Tax Department

When Mr Hemrajani from Bandra, East Mumbai was working for L&T Infotech’s United Kingdom (UK) branch in AY 2019-2020 he exercised his Employee Stock Option Plans (ESOPs) and was allotted 1,540 shares at an exercise price of Re 1 per share. However, the fair market value (FMV) of these shares was Rs 1,754 per share. So he sold the said 1,540 shares on different dates for an aggregate sale consideration of Rs 25.99 lakh.

So, the situation as it unfolded is Hemrajani, a non-resident Indian while working for L&T Infotech in United Kingdom got the option to acquire L&T infotech’s listed equity shares at Re 1 each via his company’s ESOP program and so he used the option to make Rs 25.99 lakh money.

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