Company Law : Learn about ESOPs and Sweat Equity, employee benefit plans designed to incentivize employees and enhance company performance. Und...
Company Law : Explore concept of sweat equity shares, their legal framework under Companies Act, 2013, and advantages and disadvantages of using...
Company Law : his article provides a comprehensive understanding of sweat equity shares, as defined by the Companies Act, 2013, in India. It cov...
Income Tax : Explore key ESOP (Employee Stock Ownership Plan) terminology and tax implications. Understand grant dates, vesting periods, exerci...
Company Law : Learn about Sweat Equity Shares and the process of issuing them. Explore limits, valuation procedures, and steps to issue shares u...
Income Tax : How is the FBT to be valued? And when is the tax payable? The fringe benefit is to be valued at the fair market value (FMV) of th...
Income Tax : NOTIFICATION NO. 264/2007, DATED 23-10-2007 Valuation of specified security or sweat equity share being a share in the company. 40...
Income Tax : By virtue of the provision of clause (d) of sub-section (1) section 115 WB, introduced by Finance Act, 2007, an employer is liable...
NOTIFICATION NO. 264/2007, DATED 23-10-2007 Valuation of specified security or sweat equity share being a share in the company. 40C. (1) For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security or sweat equity share, being an equity share in a company, on the date on which the option vests with the employee, shall be determined in accordance with the provisions of sub-rule (2) or sub-rule (3).
How is the FBT to be valued? And when is the tax payable? The fringe benefit is to be valued at the fair market value (FMV) of the security or sweat equity share on the date of vesting of the option minus any amount paid by / recovered from the employee for such security or shares. The FMV is to be determined a s per the method to be prescribed by the Central Board of Direct Taxes (CBDT). The employer company is required to pay advance tax of estimated FBT progressively: 15 per cent by June 15, 45 per cent by September 15, 75 per cent by December 15 and 100 per cent by March 15 of the fiscal year.
By virtue of the provision of clause (d) of sub-section (1) section 115 WB, introduced by Finance Act, 2007, an employer is liable to pay Fringe Benefit Tax on any consideration for employment provided by way of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by such employer free of cost or at concessional rate to his employees. The value of the fringe benefit is determined as the fair market value of the specified security or sweat equity share on the date on which the option vests with the employee as reduced by the amount actually paid, by or recovered from the employee in respect of such security or shares.
