Fringe Benifit Tax

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Chyavan K S

Chyavan K S (Querist)
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31 January 2008 What is SAR's stock appreciation rights, and whether it attracts FBT or not?

Sohil Ganeriwala

Sohil Ganeriwala (Expert)
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31 January 2008
1)About Stock Appreciation Rights (SARS)

A Stock Appreciation Right (SAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time. The valuation of a stock appreciation right operates exactly like a stock option in that the employee benefits from any increases in stock price above the price set in the award. However, unlike an option, the employee is not required to pay an exercise price to exercise them, but simply receives the net amount of the increase in the stock price in either cash or shares of company stock, depending on plan rules.

2) FBT is not charged for the company but it is taxed in the hands of the employees.

Chyavan K S

Chyavan K S (Querist)
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01 February 2008 Thank you for your informations
With regards
Chyavan K S