https://www.taxtmi.com/caselaws?id=798574 Voluntary compensation for diminution in the value of unexercised employee stock options following a corporate divestment is not taxable as salary where no option was exercised, cancelled, surrendered, forfeited, repurchased, allotted or transferred. A perquisite under Section 17(2)(vi) requires allotment or transfer of specified securities and valuation linked to exercise. The payment arose from the divestment rather than employment services, was not contractually or statutorily required, and was paid to all option holders, defeating the necessary employment nexus. It also cannot constitute profits in lieu of salary under Section 17(3)(ii). TDS deduction or salary reporting by the payer does not establish taxability. en-us Fri, 28 Aug 2026 00:00:00 +0530 Wed, 09 Sep 2026 08:20:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=798574 Voluntary compensation for diminution in the value of unexercised employee stock options following a corporate divestment is not taxable as salary where no option was exercised, cancelled, surrendered, forfeited, repurchased, allotted or transferred. A perquisite under Section 17(2)(vi) requires allotment or transfer of specified securities and valuation linked to exercise. The payment arose from the divestment rather than employment services, was not contractually or statutorily required, and was paid to all option holders, defeating the necessary employment nexus. It also cannot constitute profits in lieu of salary under Section 17(3)(ii). TDS deduction or salary reporting by the payer does not establish taxability. Case-Laws Income Tax Fri, 28 Aug 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=798574