ESOP Employee Without Any Contractual Obligation is , Perquisite', Taxable As Salary U/s 17(2) : Madras High Court

The Madras High Court ruled that Employee Stock Option Plans (ESOPs) provided as a part of an employee's contractual obligation are taxable as perquisites under the salary head of income tax. The court held that such benefits, when provided as part of an employment contract, constitute a taxable benefit and must be included in the employee's salary for tax purposes. This decision clarifies the tax treatment of ESOPs and reinforces the need for employers and employees to account for these benefits in their tax planning.