Budget 2026: Tax Experts Demand Clarity on Cross-Border ESOP Taxation
Personal Finance
M
Moneycontrol•20-01-2026, 18:11
Budget 2026: Tax Experts Demand Clarity on Cross-Border ESOP Taxation
- •Tax experts are urging the government for clear guidelines on taxing Employee Stock Ownership Plans (ESOPs) for professionals working across different countries.
- •The current tax framework for ESOPs in India taxes them as perquisites based on the difference between Fair Market Value (FMV) and exercise price upon exercise.
- •A major challenge arises for cross-border employees as the law lacks specific rules for apportioning ESOP income earned while working partly overseas, leading to disputes.
- •Inconsistent tax assessments often attribute the full ESOP gain to India, even when significant service periods were spent abroad, as highlighted by Deloitte.
- •Experts recommend administrative guidance from the Central Board of Direct Taxes to establish clear allocation methods and documentation norms, reducing litigation and uncertainty.
Why It Matters: Budget 2026 must clarify cross-border ESOP taxation to reduce disputes and provide certainty for global professionals.
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