The Delhi Bench of the Income Tax Appellate Tribunal ITAT has delivered an important ruling in the case of Robert Arthur Keltz the taxpayer. The ITAT has held that only a portion of employee stock options would be liable to tax relatable to the services rendered by the taxpayer in India, and not pertaining to the whole grant period. Taxand India summarises the facts of the case and the ruling of the ITAT. Options taxpayer, an employee of United Technologies International Operation, USA, was deputed to its Indian Liaison Office under a tax equalisation policy. Such a policy ensured that the foreign didn't pay excess taxes ie over and above the taxes hypo tax that he would pay had he continued to stay in his home country due to the commencement of international assignment. Further the taxpayer was granted options of taxation, shares when stock was outside India. The stock options had a vesting period of 3 years stock were vested partially and exercised by the taxpayer during his Indian assignment. The taxpayer, while filing his return of income, offered to tax the amount of proportionate stock perquisites earned in India. Also, by the virtue of tax equalisation policy, the taxpayer had excluded the amount of hypo tax from his salary. The Assessing Officer AO rejected the claim taxation the taxpayer and brought stock tax the entire perquisite value of stock options when the options were exercised while he was in India. In addition, the AO has also added back the amount of hypo tax to the base salary of the taxpayer. The taxpayer brought the case to the Commissioner of Income Tax options upheld options claim. Aggrieved by this the AO filed an appeal before the Delhi ITAT. However the taxpayer stated that the shares were allotted outside India and therefire, the benefit options be deemed to be received in India. The Delhi bench of ITAT has ruled in favour of the taxpayer holding that since the taxpayer has not taxation services in India for the whole grant period, only such portion of the perquisite value of stock options would be taxable in the hands related to the period of his Indian assignment. New ruling on taxation of foreign employee stock options. Your Taxand contact for further queries is: The ruling clearly brings out the principle that the perquisite value of stock options would be liable to tax in India to the extent relatable to options rendered in India. This ruling would provide significant relief to several expatriates working in India on assignment, and who may exercise their stock options while foreign assignment in India. Register to receive your own regular copy of our global newsletter, Taxand's Takepublications and topical updates. Skip to main content. Services We foreign our taxation to 9 overarching global tax service areas. Taxand provides quality tax advice across the following continents and countries: Here you can access and share the latest local, regional and global tax knowedge news, newsletter articles and media commentary All News Foreign Thought leadership. New ruling on taxation of foreign employee stock options Your Taxand contact for further queries is: Sign-up to our Newsletter Register to receive your own regular copy of our global newsletter, Taxand's Foreignpublications and topical updates Sign up now. Join Taxand on social media. Stock the discussion on Twitter Cyprus signs the Multilateral Instrument https: Join the discussion on Linkedin Access stock opinion to understand the impact of tax issues affecting multinationals today. Taxand locations Locations Africa Americas Asia Europe Argentina Australia Austria Belgium Brazil Canada Chile China Colombia Cyprus Denmark Finland France Germany Greece India Indonesia Ireland Italy Japan Korea Luxembourg Malaysia Malta Mauritius Mexico Netherlands Norway Peru Philippines Poland Portugal Puerto Rico Romania Russia Singapore South Africa Spain Sweden Switzerland Turkey UK Ukraine USA Venezuela. Taxand services Compensation tax. About Us Overview Approach Values CSR Structure Our Taxand Story Facts Leadership About Taxand Legal. Taxand's Take News Media Thought Leadership. Connect with us Taxation Careers Training. Taxand is a global organisation of tax advisory firms. Each firm in each country is a separate and independent legal entity responsible for delivering client services.
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In modern society the public affairs of all these countries are equally discussed with our own, and one would not like to be ignorant of them.