Ramesh Kumar, is employed by ABC Ltd., an Indian Company, which is a wholly owned subsidiary (WOS) of Finch Inc., of USA, a foreign company. Employee Ownership Plan (ESOP) shares were issued by the foreign holding compan

Valuation of Perquisites for ESOP Shares: As per section 17(2)(vi) read with explanation (b) and (c) of the Income Tax Act, 1961, the taxable value of the perquisites in the hands of employee is to be calculated on the basis of Fair Market Value 'FMV' of the shares so offered under ESOP on the exercise date as reduced by the amount actually paid or recovered against such shares from the employee. In the present case, FMV on the exercise date is ₹900/- per share and shares are offered to employee at ₹90/- per share, therefore, ₹810/- per share being the difference between the two prices be treated as taxable value of the perquisites in the hands of Mr. Ramesh Kumar for AY 2019-20. Note: Assuming the FMV on Date of Vesting as the FMV on date of Exercise of Right as in the absence of Information regarding date of Exercise of right in the question paper.