Perquisites - Value of Any Specified Security / Sweat Equity Shares allotted or Transferred to An Employee or Former Employee - (Old) Rule 3(8)

Specified securities and sweat equity shares are taxed as perquisites based on fair market value at the time of exercise.

Perquisites arise when specified securities or sweat equity shares are allotted or transferred by an employer or former employer to an employee free of cost or at a concessional rate. The value is taxable in the employee's hands in the relevant assessment year, based on the fair market value on the date of exercise of the option, after deducting any amount paid or recovered. Quoted shares are valued by reference to stock exchange prices, while unquoted shares are valued by a merchant banker on the specified date.