Wednesday, October 22, 2025
spot_img

Tax on ESOPs deferred by 5 years: Union Budget 2020

spot_img
- Advertisement -

Finance Minister Nirmala Sitharaman has announced relief on the tax burden on startup employees on ESOP tax payments.

FM presented the union budget for the financial year 2020-2021, which brought in a bundle of new announcements for the Indian startup ecosystem. With the biggest one being the proposed ease on tax burden for employee stock ownership plan (ESOPs).

Referring to startups in her Budget speech, Finance Minister said that as part of efforts to boost startups, the tax burden on employees due to tax on employee stock options would be deferred by five years or till they leave the company or when they sell it, whichever is earliest. ”

Moreover, Sitharaman has also proposed 100% deduction of profits for 3 consecutive assessment years for a period of 7 years. Whereas big players in the startup ecosystem can avail such deduction within 10 years if they have a turnover of INR 100 Cr.

In her Budget speech, Finance Minister also said that startups with a turnover of up to Rs. 25 crores will be allowed the deduction of 100 percent of their profits for three consecutive assessment years out of seven if the total turnover does not exceed Rs. 25 crores.

The startup ecosystem has applauded the move.

Commenting on the announcement Darshan Upadhyay, Partner Economic Laws Practice, on the ESOPs deference said,  “Tax on ESOPs deferred to earlier of period of 5 years or time of selling the shares at exit or leaving the job — this was one of the big hurdles on funding the tax at the time of exercise and making them cumbersome on the ESOPholders. This is a very good initiative for startups.”

Subscribe to our Daily Newsletter!

spot_img

Editorial

Why TCS Deferred FY25 Salary Hike: Better Hike Ahead?

TCS had initially announced its annual salary hike during...

Deloitte, PWC, EY, KPMG to Hire 1 Lakh People in India in FY25

According to estimates from top company officials and industry...

Higher EPS Pension Application Stuck: A Step-by-Step Guide to Fix

Nearly 97,640 Provident Fund (PF) members and pensioners under...

Employee Benefits at India’s Big 4 Firms Deloitte, PwC , EY, KPMG

The Big 4 firms; Deloitte, PwC (PricewaterhouseCoopers), EY (Ernst...

TCS Announces 4-8% Salary Hike for FY25, Lowest in Last 4 Years

Tata Consultancy Services (TCS), India's largest IT services provider,...

Must Read

Amazon aims to provide free AI skills training; Check the details

An American multinational technology company, Amazon is announcing “AI Ready,”...

Microsoft to support space-tech startups in India; Apply

Indian Space Research Organisation (ISRO) and Microsoft has signed...

Royal Enfield’s CEO changes -Eicher Motors

Vinod K Dasari has resigned as CEO of Royal...

Employee Compensation Rises by 13% in India

Recent data reveals a significant increase in employee compensation...

Microsoft Offers Digital Skills Certification Courses; Apply

An American multinational technology corporation, Microsoft is offering various...

Tech Mahindra on a Hiring Spree: Over 400 Job Openings in India

Tech Mahindra, a leading global IT services and consulting...

Hina Nagarajan takes charge as MD & CEO of Diageo India

In December 2020, Hina Nagarajan who was announced to...

Talent Conversations

 A senior business leader was attending a session on...

Related Articles

SightsIn Plus
SightsIn Plushttps://sightsinplus.com/
SightsIn Plus is an India’s leading high-quality people-focused monthly HR Magazine and provides up-to-date HR News, Leadership Announcements, Best HR Practices and Insights by Global CHROs, CEOs, HR Advisors, Business Managers and HR Heads on topics of interest to HR professionals. To subscribe SightsIn Plus, HR Magazine please visit- https://sightsinplus.com/subscribe/