Analyzing Tax Implications of Employee Incentives
Lakshmikumaran & Sridharan Attorneys is organising a webinar on Analyzing Tax Implications of Employee Incentives - Spotlight on ESOPs.
Date & Time
26
Oct 2023 | 4:00 PM
Employee remuneration schemes has transformed from the traditional cash only rewards to granting ownership based non-monetary perquisites. Employee Stock Option Plans (ESOPs) are one such incentives which provide an employee an entitlement to hold shares of the employer or any group entity of the employer. Such plans take different forms such as a plain vanilla stock option or purchase plan, stock appreciation rights (SARs), restricted stock units (RSUs) etc.
While the modus operandi of these variants may be different, they are essentially structured to entitle an employee to either ownership in shares or to cash payments that are linked to the value of the shares. Such ESOPs entail different tax implications for grantor, the employer and the employee
The webinar focusses on the Direct and Indirect Tax implications that may arise from such transactions and specifically cover the following aspects:
- Deduction for employer under IT Act in respect of expense debited in P&L Account for ESOPs.
- Deduction for employer under IT Act in respect of reimbursements made to group entity for ESOPs granted by them.
- Deduction for grantor and for employer under IT Act in respect of ESOPs granted by group entity where no reimbursement is made.
- Application of provisions of Section 206C(1G) of IT Act, in respect of reimbursements made to group entity and the amounts paid by the employees to the group entity towards the ESOPs.
- Requirement for tax deduction in respect of grant of ESOPs by the group entity.
- Direct Tax implications in the hands of the employees.
- GST implications in respect of the grant of ESOPs by group entity
Speakers:
- Ms. Bharathi Krishnaprasad, Associate Director, LKS
- Mr. B. Venkat Ramanan, Principal Associate, LKS
