Perquisite - Valuation of specified security not being an equity share in the company [Rule 3(9)] & Income pertaining to ESOP of start-ups. - Income Tax - Ready Reckoner - Income Tax

Valuation of specified security not being an equity share in the company [ Rule 3(9 )] The fair market value of any specified security, not being an equity share in a company, on the date on which the option is exercised by the employee, shall be such value as determined by a merchant banker on the specified date. Tax payment in respect of income pertaining to Employee Stock Option Plan (ESOP) of start-ups [Inserted by Finance Act, 2020 , W.e.f. AY 2021-22] ESOPs have been a significant component of the compensation for the employees of start-ups, as it allows the founders and start-ups to simply highly talented employees at a relatively low salary amount with balance made up via ESOPs. The eligible start-ups or TDS by the start-up employer, the Finance Act, 2020 has inserted section 192(1C) to clarify that for the purpose of deducting or paying tax u/s 192(1) or 192(1A) thereof, as the case may be, a person, being an elible start-up referred to in section 80-IAC , responsible for paying any income to the assessee being perquisite of the nature specified in section 17(2)(vi), in any PY relevant to AY 2021-22 or subsequent AY, deduct or pay, as the case may be, tax on such income within 14 days- after the expiry of 48 months from the end of relevant AY; or from the date of sale of such specified security or sweat equity share by the assessee; or from the date of which the assessee ceases to be the employee of the person; Whichever is the earliest on the basis of rates in force of the FY in which the said specified security or sweat equity share is allotted or transferred.