27 January 2013
ESOPs are issued by the company to its employees or directors.During the lock in period also the employee has to hold the ESOPs. An employee can not transfer his ESOPs to a non-employee. . These are not gifted by the company. Even, these are issued under the terms of a contract. . A gift is made without any consideration. . In case of ESOPs there is certain consideration. . These are issued to get directly or indirectly -financial returns. . The employer employee relationship makes ESOPs taxable as salary (perquisites). . As such the proviso to Section 47(iii) can be understood as explanatory in nature so as to avoid unnecessary litigations. .
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