https://www.taxtmi.com/caselaws?id=236337 ITAT Bangalore (SB) held that discount on shares issued under an ESOP constitutes employee cost and is allowable as a deduction in computing business income. The Tribunal ruled that the liability for ESOP discount accrues over the vesting period, as the employee renders service and progressively earns the right to exercise options. Deduction must therefore be spread on a straight-line basis over the vesting period, with reversal for unvested/lapsed options and adjustment at exercise based on the difference between market price at grant and at exercise. In the assessee's case, front-loading the deduction in the first year was disallowed and the total discount was directed to be evenly apportioned across the four-year vesting period. en-us Tue, 16 Jul 2013 00:00:00 +0530 Mon, 15 Dec 2025 11:13:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=236337 ITAT Bangalore (SB) held that discount on shares issued under an ESOP constitutes employee cost and is allowable as a deduction in computing business income. The Tribunal ruled that the liability for ESOP discount accrues over the vesting period, as the employee renders service and progressively earns the right to exercise options. Deduction must therefore be spread on a straight-line basis over the vesting period, with reversal for unvested/lapsed options and adjustment at exercise based on the difference between market price at grant and at exercise. In the assessee's case, front-loading the deduction in the first year was disallowed and the total discount was directed to be evenly apportioned across the four-year vesting period. Case-Laws Income Tax Tue, 16 Jul 2013 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=236337