Tax Hotline
July 02, 2001
Indian Government issues draft ESOP Guidelines
In accordance with the powers given under section 17 of the Income Tax Act, 1961, the Central Government has issued draft guidelines in respect of Employees Stock Options ("ESOs"). These guidelines would cover all types of ESOs and the rules would be finalized after discussions.
The exercise price should not be less than the face value of shares. Companies would be required to file detailed particulars of the ESO plan in prescribed format with the Chief Commissioner of Income-tax (CCIT) within six months of issuance of these guidelines. Companies will have the discretion to determine the lock-in period, conditions of transfer, pricing formula, eligibility of employees and the manner of obtaining approval from shareholders. The scheme would be required to give all these details. In case of unlisted companies, CCIT should approve the basis of valuation of shares issued.
Our next "Legal Update" will cover the details of these guidelines upon finalization.
Source: The Economic Times, July 2, 2001; Business Standard, June 30, 2001
Disclaimer
The contents of this hotline should
not be construed as legal opinion. View detailed disclaimer.
This hotline does not constitute a
legal opinion and may contain information generated
using various artificial intelligence (AI) tools or
assistants, including but not limited to our in-house
tool,
NaiDA. We strive to ensure the highest quality and
accuracy of our content and services. Nishith Desai
Associates is committed to the responsible use of AI
tools, maintaining client confidentiality, and adhering
to strict data protection policies to safeguard your
information.
This hotline provides general information
existing at the time of preparation. The Hotline is
intended as a news update and Nishith Desai Associates
neither assumes nor accepts any responsibility for any
loss arising to any person acting or refraining from
acting as a result of any material contained in this
Hotline. It is recommended that professional advice
be taken based on the specific facts and circumstances.
This hotline does not substitute the need to refer to
the original pronouncements.
This is not a spam email. You have
received this email because you have either requested
for it or someone must have suggested your name. Since
India has no anti-spamming law, we refer to the US directive,
which states that a email cannot be considered spam
if it contains the sender's contact information, which
this email does. In case this email doesn't concern
you, please
unsubscribe from mailing list.
|