How to save tax on indian non listed company exercised Esop.

Ans: we have a double taxation treaty with US, so its better you sell there, pay taxes in US and get that money in your Indian Bank Account

Ans: Any profit arising on the sale of shares allotted to you under the ESOP or any similar scheme is taxed under the head “Capital Gains" in India. The profits made on such shares shall be taxed as long-term capital gains if these shares are held for more than 24 months. You are entitled to claim indexation for computing the long-term capital gains. Long-term capital gains are taxed at a flat 20% after indexation. If the shares are sold within 24 months, the profits shall be taxed as short-term capital gains. The short-term capital gains are treated like your regular income and get taxed at a slab rate applicable to you. The holding period shall start from the date of allotment of the shares and not from the date of allotment of the ESOPs. I presume your employer had deducted/collected tax on the difference between the fair market value of the shares and the exercise price on the date of allotment. So when you sell these shares, the fair market value of such shares on the date of allotment shall be treated as your cost. Any excess realised over such cost shall be treated as capital gains.

Ans: There is no exemption to this effect in your income tax return. Your Form 16 has already factored that in and accordingly TDS has been deducted. This is the way ESOP work. However, any discrepancy in this, please check with your HR.

Please consult your CA before moving ahead.

Ans: Hi,
Sadly there is no way to save tax on exercised Esop.
Let me know if you need more help.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/