—Paresh K. BambhaniyaStock-based incentive income is taxable in the hands of the employee. On sale of shares, the nature of income will be capital gain and you will have to deposit tax as advance tax or self-assessment tax. The FMV can be determined on the date of exercise, or on any date that falls within 180 days prior to the exercise date. Long term capital gain (LTCG) from unlisted shares is taxed at 20% plus the applicable surcharge and education cess, with the benefit of indexation. Thus, it is taxed at an effective rate of 23.69%, if the total taxable income is more than Rs1 crore.

Source: Mint February 20, 2017 11:53 UTC