New rules for valuation of ESOPs

  
As per new notification by Income tax department (Notification No. 94/2009/ F.No.142/25/2009-S O (TPL) dated 18-12-2009), valuation of Equity Shares given under ESOP scheme shall be valued by Cat I Merchant Banker as on specified dates for perquisites valuation (Applicable where shares are not listed on any recognized stock exchange in India).

Specified date means,
(i) the date of exercising of the option; or
(ii) any date earlier than the date of the exercising of the option, not being a date which is more than 180 days earlier than the date of the exercising.
In nutshell new rules for valuation are same as were in case of FBT, with only difference being earlier it was to be valued as per Vesting dates. Now it will be valued as per exercise date.
The entire tax liability on perquisites is to be recovered in the remaining three months of the year if employers have not deducted any tax so far.
These rules come into force from 1at April, 2009.