ESOP

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Guest

Guest (Querist)

23 September 2009 I've query on ESOP Trust. Pls guide me me on this.
My client is a listed company. They have created a ESOP Trust ( Employee stock option trust) for alloting shares under ESOP scheme. Shares have been alloted to the trust in the year 2006 at Rs .51/-. Now the shares are transferred to the eligible employees at Rs. 211/- as per the Esop scheme. I would like to know how the difference between Rs. 211/- and Rs 51/- will be dealt in the books of the trust. Is it taxable as long term capital gain.

I'm of the opinion that it is not taxable by applying the principle of mutuality. Since the beneficiaries are employees and the transfer is being made to the employees, the difference of income is not taxable. Is my view correct? Kindly give your opinion.

Rajeev

Rajeev (Expert)
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24 September 2009 not sure rahul but here is a supreme court judgement on this of infosys ...hope u locate and find out , i dont remember the citation , they had a infosys employee welfare trust for ESOPs

hope it helps