ITAT treats Flipkart ESOP buyback payout as capital gains, not salary
Bengaluru’s ITAT held that a Flipkart employee’s Rs 2.33 crore payout for repurchased vested but unexercised ESOPs should be taxed as capital gains because no shares were allotted. The ruling could shape ESOP tax outcomes for startup employees, subject to further appeal.
Bengaluru ITAT ruled Flipkart employee’s Rs 2.33 crore payout from repurchased, vested but unexercised ESOPs is taxable as capital gains rather than salary, as no shares were allotted. The decision may influence ESOP tax treatment for Indian startup employees.
Why this matters
The ruling follows recent signals on Bengaluru ITAT treating Flipkart’s ₹2.33 crore ESOP buyback payout as long-term capital gains, while Flipkart’s recent iPhone 17 Pro promotion reflects continued consumer-facing activity.
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