Amendments in ESOP Scheme

Contents  hide 

1 As per Finance act, 2020[1] which is applicable F.Y. 2021-2022,

2 Reference

3 Related

As per Finance act, 2020[1] which is applicable F.Y. 2021-2022,

Amendments-

• Section 68 of the Act, issues amendments in section 140A, where it says that Employees shall be able to defer the tax liability in respect of perquisite value of ESOPs to subsequent years.

• Section 71 of the act amends section 156 of the Income Tax act, 1961. It states that if employee doesn’t pay tax directly, assessing officer is empower to issue notice of demand. The amendments also specifies that where the specify security or sweat equity shares refer to in the section 17(2)(vi) are allot or transfer directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC, the tax or interest on such income included in the notice of demand refer to in sub-section shall be payable by the assessee within fourteen days––
  • after the expiry of forty-eight months from the end of the relevant assessment year
  • from the date of the sale of such specified security or sweat equityshare by the assessee
  • from the date of the assessee ceasing to be the employee of theemployer who allotted or
  • transferred him such specified security or sweatequity share, whichever is the earliest.

• Another amendment has been make in section 191 of the Income Tax act, under section 72 of the Finance Act, if employer doesn’t deduct tax in subsequent year, employee shall be liable to pay tax directly.
• Section 73 of the act amends section 192 of the Income Tax act, where it to provide deduction under section 80-IAC to eligible start-up for a period of 3 consecutive assessment years out of 10 years beginning from the year in which the eligible start-up is incorporate. Earlier, this deduction was available for 3 consecutive financial years out of the first 7 years.

---

Reference

[1]http://egazette.nic.in/WriteReadData/2020/218938.pdf