ITAT Treats Flipkart’s Unexercised ESOP Buyback Gains as Long-Term Capital Gains
The Income Tax Appellate Tribunal ruled that payments to Flipkart employees for vested but unexercised ESOPs repurchased by the company are taxable as long-term capital gains, not salary perquisites. The decision could reduce tax exposure for eligible employees and shape ESOP buyback structures across startups.
ITAT ruled that payments for vested, unexercised ESOPs repurchased by Flipkart are taxable as long-term capital gains rather than salary perquisites, potentially lowering employee tax liabilities and affecting startup ESOP buyback accounting and disclosures.
Why this matters
The ruling extends recent Flipkart ESOP tax signals, including the Bengaluru ITAT decision and the report of a ₹2.33 crore employee payout treated as LTCG rather than salary.
Retail-company signals are accelerating, up +95013% QoQ.
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