# ESOP Tax Calculator India: Perquisite and Capital Gains Tax

> ESOP tax calculator for India: perquisite tax at exercise on fair value minus price, then capital gains on sale, for ESOPs and RSUs, listed or unlisted.

Source: https://trykosh.com/tools/esop-tax-calculator

Free tool - Income tax

# ESOP tax calculator

ESOPs are taxed twice: once when you exercise, as salary, and again when you sell, as capital gains. See both.

Rules checked 25 October 2026Free - no sign-upRuns in your browser

Total tax on these ESOPs

INR 1,65,750

Net in hand after tax and exercise cost: INR 5,34,250

Perquisite at exercise (FMV − price)

INR 5,00,000

Tax on perquisite at 30% + cess

INR 1,56,000

Capital gain at sale (sale − FMV)

INR 2,00,000

− Exempt LTCG (INR 1.25 lakh a year)

INR 1,25,000

Capital-gains tax (long-term, 12.5%)

INR 9,750

The perquisite is taxed through your salary in the year you exercise, even if you don't sell. Eligible start-up employees can defer it.

## Upload your statement and Kosh does this for you.

Upload a bank statement or salary slip and Kosh works out your tax under both regimes from your real numbers, finds the deductions you're missing and reminds you before every deadline.

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## How the ESOP tax calculator works

At exercise, the difference between the share's fair market value on the exercise date and the price you pay is a perquisite, taxed as salary at your slab rate. Your employer deducts TDS on it through payroll, even though you've received shares, not cash.

When you later sell, your cost for capital gains is the fair market value used for the perquisite, not your exercise price. Listed shares held more than 12 months are long-term: 12.5% above the INR 1.25 lakh yearly exemption; otherwise 20%. Unlisted shares need 24 months for long-term treatment at 12.5%, and short-term gains on them are taxed at your slab.

Employees of eligible DPIIT-recognised start-ups can defer the perquisite tax until the earliest of 48 months from the year of allotment, leaving the company or selling the shares.

## Worked example: Kavya exercises 2,000 options

Kavya exercises 2,000 options at INR 50 when the shares trade at INR 450. The INR 8 lakh gain is a perquisite taxed at 30% plus cess: INR 2,49,600. Twenty months later she sells at INR 700. Her INR 5 lakh capital gain is long-term; after the INR 1.25 lakh exemption she pays INR 48,750. Her total tax is INR 2,98,350.

Total tax on these ESOPs

INR 2,98,350

Net in hand after tax and exercise cost: INR 10,01,650

Perquisite at exercise (FMV − price)

INR 8,00,000

Tax on perquisite at 30% + cess

INR 2,49,600

Capital gain at sale (sale − FMV)

INR 5,00,000

− Exempt LTCG (INR 1.25 lakh a year)

INR 1,25,000

Capital-gains tax (long-term, 12.5%)

INR 48,750

The perquisite is taxed through your salary in the year you exercise, even if you don't sell. Eligible start-up employees can defer it.

[Load this example into the calculator ->](?shares=2000&strike=50&fmv=450&sale=700&months=20#calculator)

## Good to know

-   Keep the merchant banker's valuation report for unlisted shares; it sets the FMV for the perquisite.
-   Foreign RSUs and ESOPs must be disclosed in Schedule FA of your ITR even before you sell.
-   Taxes paid abroad on foreign RSUs can usually be credited in India using Form 67.

## Frequently asked questions

When are ESOPs taxed in India?

Twice: at exercise, on fair market value minus exercise price, as salary; and at sale, on sale price minus that fair market value, as capital gains.

Are RSUs taxed the same way?

Yes. RSUs are taxed as a perquisite at vesting on the full fair value (there's usually no exercise price), and as capital gains on sale.

How are ESOPs of foreign companies taxed?

The same two-stage way, with the foreign share treated as unlisted in India: long-term after 24 months at 12.5%, short-term at slab rates.

## Sources and assumptions

-   [Income Tax Department](https://www.incometax.gov.in/)

Rules and rates last checked on 25 October 2026. Results are estimates for planning and education, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting.