https://www.taxtmi.com/caselaws?id=773216 One time compensation for diminution in value of employee stock options (FSOP) paid before exercise or allotment was held to be a capital receipt, not a perquisite taxable under income from salary; consequently it is not taxable as capital gains because no sale or transfer or shares existed. Taxability on FSOPs arises only on exercise (difference between fair market value and exercise price taxed as perquisite) or on sale of allotted shares (capital gains); absent those events and lacking determinable cost of acquisition, the payment cannot be taxed and a Nil Tax Deduction Certificate was directed. en-us Mon, 02 Jun 2025 00:00:00 +0530 Mon, 09 Feb 2026 10:14:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=773216 One time compensation for diminution in value of employee stock options (FSOP) paid before exercise or allotment was held to be a capital receipt, not a perquisite taxable under income from salary; consequently it is not taxable as capital gains because no sale or transfer or shares existed. Taxability on FSOPs arises only on exercise (difference between fair market value and exercise price taxed as perquisite) or on sale of allotted shares (capital gains); absent those events and lacking determinable cost of acquisition, the payment cannot be taxed and a Nil Tax Deduction Certificate was directed. Case-Laws Income Tax Mon, 02 Jun 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=773216