Merchant bankers to value ESOPs by foreign companies

The Central Board of Direct Taxes on Wednesday said equity and debentures of foreign companies given as stock option to employees will be valued by merchant bankers for the purpose of calculating Fringe Benefit Tax (FBT). The valuation of "specified security" would be done by merchant bankers, CBDT said while amending the Income Tax Rules concerning imposition of FBT. The specified securities would include equity of foreign companies, preference shares and debentures. Government had in the 2007 budget introduced FBT on value of Employee Stock Option Scheme (ESOPS) and later laid down the detailed guidelines for valuation of such benefits. The CBDT today clarified that equity or benefits received as ESOPS by employees from foreign companies would be valued by merchant bankers for levying FBT. – www.economictimes.com