New Delhi, Dec 7 () ESOPs should be taxed only when the benefits
are realised by an employee, said a report on taxation in the
digital economy.
Companies offer stocks to their employees by way of Employee
Stock Option Plans (ESOPs).
The digital economy employs a lot of employees, many of whom are
rewarded through ESOPs, said the report 'Taxation of the
Digital Economy: Impact analysis for India', prepared by the
Internet and Mobile Association of India (IAMAI) and Nishith Desai
Associates.
"Keeping in mind the needs of employees in a growing
sector, such as digital economy and keeping in mind liquidity
issues at the time of grant of stock under ESOP schemes, it is
important that employees should not be taxed before they actually
realize any benefit in relation to the stock issued to them,"
the report said.
