ESOPs FROM FOREIGN COMPANIES BROUGHT UNDER FBT NET

Equity shares of foreign companies allotted to employees in their Indian subsidiaries through Employee Stock Option Plans (ESOPs) have now been brought under the Fringe Benefit Tax (FBT)
net. The Finance Ministry has done away with a definition of “equity shares” in the existing guidelines on valuation of equity shares for the purpose of FBT on ESOPs. With the removal of the definition, the meaning of equity shares has been widened to take the general meaning under the income-tax law and thereby include equity shares issued by foreign companies.