• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

BG Mahesh | mahesh.com

Internet in India

  • Home
  • Indian-Languages
  • Karnataka.com
  • Links
  • Gallery
  • About Mahesh
  • Contact Me
  • Show Search
Hide Search

Govt of India ‘should’, not ‘may’ rewrite ESOP rules

BG Mahesh · May 8, 2019 · Leave a Comment

For startups that receive institutional funding ESOPs are a very handy instrument to attract and retain employees. Earlier the rules of ESOPs (employee stock options) were attractive, but somewhere down the road the rules became draconian.

According to today’s Economic Times the govt is considering to rewrite the rules. Currently when an employee exercises his vested stock options the capital gains is payable immediately.

Image by Lorenzo Cafaro from Pixabay

Most companies allow you to hold the vested options without having to exercise them provided you continue to work for them. This policy, however, is an internal matter and has nothing to do with the government.

The painful issue is when an employee exercises the options at the strike price but has no buyer for the shares. You pay a hefty capital gains because the strike price is very low, rather negligible when compared to the fair market value.

So you pay capital gains before actually being able to sell shares for real money. And at a later date when you actually do sell the shares you can claim credit for the capital gains which was paid at the time of exercising the shares.

This rule ‘may’ go says the article. You can convert your options at the strike price, hold it until you find a buyer. Pay capital gains only when you actually sell your shares for money.

This would be a very welcome change. A much needed change. This will energize startups in a big way.

Related

Filed Under: Entrepreneurship Tagged With: esop

Reader Interactions

Leave a Reply Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Connect

  • Facebook
  • LinkedIn
  • Twitter

Top Posts

  • Digital India: A list of popular government websites in India
    Digital India: A list of popular government websites in India
  • False Narrative is more dangerous than Fake News
    False Narrative is more dangerous than Fake News
  • Indian Language Digital Tools, Portals & Mobile Apps
    Indian Language Digital Tools, Portals & Mobile Apps
  • Personal Finance Management & Robo Advisory apps need of the hour
    Personal Finance Management & Robo Advisory apps need of the hour
  • Is it safe for a woman to travel overnight in our buses?
    Is it safe for a woman to travel overnight in our buses?

Recent Posts

  • Digital Media needs an Online Dispute Resolution system
  • Digital Ad spend in India to grow 28% in 2021
  • A Self Regulatory Organization Needed For Digital Media in India
  • 1995-2020: 25 years of internet in India
  • Sahamati turns one!

Categories

  • Government
  • Internet Portals
  • Mobile
  • Online Advertising
  • Internet
  • Media
  • Social Media
  • Broadband
  • Indian Languages
  • etc

Tags

3g acquisition bangalore books Broadband broadband penetration browsers comscore dailyhunt digital advertising in india digital india domain name Ecommerce election campaign election digital campaign elections facebook google iamai imrb india online advertising indic indic fonts internet penetration kannada market size mobile advertising mobile apps mobile internet mobile marketing mobile penetration my column mysore nielsen oneindia online advertising forecast Print Media sjce smartphones tier-2 tv advertising twitter vijay next whatsapp yahoo

Copyright © 2022 · Mahesh.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT