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<keyword id="19898109" type="General" weightage="100" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>'s parent company, <keyword id="20253123" type="General" weightage="20" keywordseo="One97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One97 Communications" meta.hostid="261" meta.entityid="One97 Communications">One97 Communications</keyword>, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore. Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore. This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis. The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (<keyword id="23641220" type="General" weightage="20" keywordseo="Default-Loss-Guarantee" source="keywords">default loss guarantee</keyword>) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments. "Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today. The company's revenue from its payment business also inched up 9% on a quarterly basis, along with its revenue from <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which also grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter. During the previous quarter, Paytm's <keyword id="20253122" type="General" weightage="20" keywordseo="gross-merchandise-value" source="keywords">gross merchandise value</keyword> (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season. Per its release, Paytm aims to achieve <keyword id="23641219" type="General" weightage="20" keywordseo="EBITDA-profitability" source="keywords">EBITDA profitability</keyword> (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

<ul><li>In case of listed companies where the market value of the share is lower than the predetermined price in <keyword id="120103" type="General" weightage="80" keywordseo="esop" source="Orion">ESOP</keyword>, the employee should not exercise the option.</li><li>It is crucial to consider the company's financial health and growth prospects when assessing the worth of ESOPs.</li><li>You can sell a portion of the shares obtained through exercising your ESOPs right away to cover the costs associated with exercising, including any taxes owed.</li></ul>A few days ago, Infosys offered 5.11 lakh shares to its employees under Employee Stock Ownership Plans (ESOPs). ESOPs are extensively employed by corporations worldwide to incentivize employees to become stakeholders in the company. By offering employees the opportunity to own equity in the company, ESOPs aim to align their performance and dedication with the organization's success. In recent years, ESOPs have gained significant popularity, particularly among startups, as an effective tool for attracting and retaining top talent. Startups leverage ESOPs to not only reward employees but also to create a sense of ownership and motivation, driving their commitment and contribution to the company's growth.We take a look at what you need to keep in mind when exercising your stock options. “Under ESOP, employers grant options to its employees which are exercisable against company’s shares at future date, on fulfillment of defined vesting conditions. For this purpose, the employee pays the exercise price (set as zero or less than fair market value (FMV)) at the time of exercise of shares in future. Therefore, no upfront costs are associated with ESOPs at the time of grant,” says Akhil Chandna, Partner, Tax, <keyword id="10410446" type="General" weightage="50" keywordseo="grant-thornton-bharat" source="Orion">Grant Thornton Bharat</keyword>, a professional services firm. <cmsannotation type="cmsannotation" annotationid="Understanding exercise options" comment="subhead" text="Understanding exercise options">Understanding exercise options</cmsannotation> “Most reputed companies have a vesting period of four years, with 25% of the ESOPs becoming eligible for exercise each year after the initial one-year cliff. This means that after the first year, employees can exercise 25% of their ESOPs and subsequently exercise 25% over the following three years on a monthly pro-rata basis,” says Ajinkya Kulkarni, Co-Founder, and CEO, <keyword id="12504599" type="General" weightage="50" keywordseo="wint-wealth" source="Orion">Wint Wealth</keyword>, an online investment platform focussed on fixed income products. There are two common types of approaches when it comes to exercise prices. The first approach sets the exercise price as the face value of the shares. Thus it is significantly cheaper for employees to purchase the shares. The second approach involves the employee paying the market value of the shares at the time of exercising the option, where the exercise price would be higher. Employee-friendly companies may offer an exercise period of up to 10 years after the employee leaves the organization, providing greater liquidity opportunities for employees. “A sufficient exercise window is crucial since the notional gains from exercising an option are immediately taxable for employees, even though the actual wealth is realized upon liquidation of the shares,” says Kulkarni. <cmsannotation type="cmsannotation" annotationid="What to keep in mind when exercising options" comment="subhead" text="What to keep in mind when exercising options">What to keep in mind when exercising options</cmsannotation> When exercising an option see if there is a condition that the option will lapse if you do not exercise. “Then you should exercise. But if there is an option that it will be carried forward, there is no need to exercise immediately,” says <keyword id="5754055" type="General" weightage="50" keywordseo="bm-singh" source="Orion">BM Singh</keyword>, ESOP Expert &amp; Managing Partner, BMSA Consultancy. The actual value of ESOPs in a company is closely tied to its future performance and market valuations. Even if ESOPs hold a significant monetary value on paper, if the company's performance is poor, their true benefits may be limited. It is crucial to consider the company's financial health and growth prospects when assessing the worth of ESOPs. Ultimately, ESOPs are most advantageous when granted by companies with strong performance and promising future prospects.Therefore, employees should conduct thorough background research before accepting an offer that includes a substantial ESOP component. Chandna says that in the case of listed companies where the market value of the share is lower than the predetermined price in ESOP, the employee should not exercise the option. For unlisted companies, the employee should also research the company’s buyback track record during the vesting period and whether the company will raise capital through a funding round etc, to know the exit possibilities. <cmsannotation type="cmsannotation" annotationid="Tax implications at the time of exercise" comment="subhead" text="Tax implications at the time of exercise">Tax implications at the time of exercise</cmsannotation> Taxability of ESOPs first occurs at the time of exercising the options, where the perquisite value of the ESOPs is deemed taxable under the category of 'salary' in the hands of the employees. When employees exercise their ESOPs, the difference between the fair market value of the shares at the time of exercise and the exercise price is treated as a taxable perquisite. This value is added to the employee's salary and subject to applicable income tax regulations. “Please note that the taxable value of perquisite would be computed basis the date of exercise of options /units, however, the same would be taxable in the year in which shares are actually allotted/ transferred to the employees,” says Chandna. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Name of employee </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">A </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Grant date of ESOP </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1 April 2023 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Vesting date of ESOP </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1 April 2024, 1 April 2025 (50% at each date) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Exercise date of ESOP/date of allotment of shares </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1 April 2026 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FMV as on Exercise date i.e. 1 April 2026 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Exercise price </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹100 </td></tr></tbody><tbody></tbody><tbody></tbody></table> In the above illustration, the taxability would arise in the hands of Mr. A on exercise date i.e. 1 April 2026 (FY 2026-27). The taxable value would be ₹900 (i.e. ₹1000 as reduced by ₹00) on 1 share. Source: <keyword id="131240" type="General" weightage="80" keywordseo="grant-thornton" source="Orion">Grant Thornton</keyword> <cmsannotation type="cmsannotation" annotationid="How to minimize out of pocket expenses when exercising ESOPs" comment="subhead" text="How to minimize out of pocket expenses when exercising ESOPs">How to minimize out of pocket expenses when exercising ESOPs</cmsannotation> “To minimize the duration between tax obligations on notional gains and the actual gains, it is advisable to exercise ESOPs closer to liquidity events,” says Kulkarni. You can sell a portion of the shares obtained through exercising your ESOPs right away. The proceeds from the sale can be used to cover the costs associated with exercising, including any taxes owed. This strategy effectively lowers your out-of-pocket expenses by utilizing the funds generated from selling the shares. “Let us say that you are entitled to exercise 50 shares. If you get a chance to sell 10 shares in the secondary market, then you can sell the shares and cover the expenses from the proceeds,” says Singh. By creating a budget and developing a financial plan, you can ensure that you have the necessary funds for exercising ESOPs while minimizing your out-of-pocket expenses. Through careful financial management, such as setting aside money in advance or reallocating your financial resources, you can mitigate the impact on your personal expenses when it comes time to exercise your ESOPs.

What you need to know when you exercise your stock option plan

<ul><li>The government has had initiatives like Skill India Mission, Digital University, and it would be interesting to see what kind of investments continue from a <keyword id="6358021" type="General" weightage="20" keywordseo="budget" source="Orion">budget</keyword> standpoint. </li><li>On the tax front, reform of ESOP taxation, there should be only Capital Gains tax on the difference between the grant price and sale price of shares. </li><li>Health insurance is predominantly focussed on inpatient benefits, and we need to do more on in-person outpatient access. </li></ul>The next few years are going to be turbulent for the global economy. Still working through post-Covid recovery, we are already confronted with new challenges of looming recession, high inflationary pressure, dealing with new models of the future of work and significant talent crunch. Next 12 months will need leaders and businesses to navigate complexities not seen before. India will hopefully continue to remain a bright spark. Over the next few years, the biggest challenge for companies in India will be not lack of capital, but talent availability in quality and quantity to fuel and drive growth. India needs to bring new talent to work, develop new talent hubs and build skills and capabilities rapidly to realize its full potential. Here are a few things that can help India Inc become more competitive; skills easier to develop and build; workplaces more exciting and life of employees easier. <ul><li>Skill Gap Challenge has been a big area of focus for the government. Its relevance for organizations as they evolve their businesses into becoming more digital focused cannot be emphasized enough. The government has been focusing in this area with initiatives like Skill India Mission, Digital University, etc. and it would be interesting to see what kind of investments continue from a budget standpoint for skilling in India. The Union Education Minister made a statement recently highlighting government focus and more funds to be allocated for the implementation of the NEP (National Education Policy) in the new budget. Employees will prefer an exemption on the money spent for reskilling spent on themselves and families (currently this is applicable for fees paid for children). This could provide a financial motive for individuals to invest in themselves. Given the fast-changing technology, reskilling will become more like a norm rather than a necessity especially as the government pushes India as a manufacturing hub and help India accelerate its journey towards digital readiness. Skill development and continuous supply of skills will be one of the most important aspects that will drive business performance and growth in years to come. </li></ul><ul><li>On the tax front, reform of ESOP taxation, there should be only Capital Gains tax on the difference between the grant price and sale price of shares. No perquisite tax on exercise as the shares are not freely tradable (or say ready market isn’t available). This provision is at present available to only recognised startups in India. This should be extended to all private companies in India. In addition, many business leaders in India have asked for a greater push for ESPS (Employee Share Purchase Programs). In this, employee shells out a part of their monthly salaries towards contribution to a fund (and equally matched by the employer) for purchasing the shares of the company on a later date. This can also be made part of Employee Provident Fund regulations. This will ensure ownership/ skin-in-the-game. </li><li>Tax and incentives on aspects like the gig workforce and employing greater women in the workforce will significantly increase talent supply and provide much needed fuel to businesses. Higher talent supply will also help control double digit salary increases that India Inc cannot afford on a continuous basis. </li><li>Some of the other areas where clarity and policy would help include, clearer roadmap and faster adoption of labour codes and clarity around wage definitions, relaxation of rules around retrenchment/layoffs, clarity on moonlighting and long-term policy on remote work in the context of SEZ. </li><li>On the health and wellbeing front, increased focus on tax sops for preventive care and support for outpatient benefits via higher tax-free limits or encouraging investments in enabling infrastructure. In addition, health check-up tax benefits are limited to ₹5,000 today and this is inadequate for single income families (maybe get it to ₹10,000). Also, the health insurance market is predominantly focussed on inpatient (hospitalization) benefits, and we need to encourage early detection of illness hence encourage citizens to access primary care (telemedicine is being already enabled via National Health Mission initiatives but we need to do more on in-person outpatient access). Post-pandemic (which required outpatient benefit access) there is a heightened awareness of these limitations and hence the need to support this now given these are expensive. </li><li>Some other areas of opportunity here include increases support on healthcare infrastructure private investments, review of 18% GST on insurance medical benefit plans which also do not get input tax credit today, need to regulate healthcare sector delivery (hospitals for example) and resultant cost increases (which are currently fully market dictated today). Also, there is a need to increase social security provisions for healthcare for employees particularly in the post retirement phase via new initiatives. This can be part-funded by willing employees themselves. Commercial insurance products for this segment are very expensive or non-existent at that age bracket. </li></ul>(The author is CEO, Aon Consulting, India &amp; South Asia) SEE ALSO <a href="https://www.businessinsider.in/budget/news/budgeting-for-climate-change/articleshow/97378027.cms">Budgeting for the fifth C</a> <a href="https://www.businessinsider.in/budget/news/budget-2023-funding-support-liberal-tax-regime-and-other-things-fintechs-expect-from-the-government/articleshow/97373905.cms">Budget 2023: Funding support, liberal tax regime and other things fintechs expect from the government</a>

India budget expectations: Reform in ESOP taxes, allocations needed to address skill gaps

<ul><li>With <keyword id="8420431" type="UNKNOWN" weightage="20" keywordseo="budget-2021">Budget 2021</keyword> around the corner, India’s IT body NASSCOM has submitted its suggestions for <keyword id="6362513" type="UNKNOWN" weightage="20" keywordseo="startups">startups</keyword> which includes further tax relaxations for employee stock ownership plans. </li><li>NASSCOM’s public policy head said that <keyword id="173739" type="PERSON" weightage="20" keywordseo="Esops">ESOPs</keyword> should be taxed only when an employee sells the shares.</li><li>During Budget 2020, Finance Minister Nirmala Sitharaman had said that ESOPs can be taxed within five years or when they leave the company or when they sell their shares, whichever is earliest.</li></ul>When India’s Finance Minister Nirmala Sitharaman announced tax relaxations for Employee Stock Ownership Plans (ESOPs) during Budget 2020, India’s entrepreneurs welcomed the decision. But one year down the line, they are having second thoughts. “The Finance Minister had relaxed the conditions with respect to the Employee Stock Ownership Plans but that’s not sufficient based on the industry feedback. What the industry really requires is that the liability of paying the tax should be deferred to the time when the shares are actually sold by the employees,” Ashish Aggarwal, Nasscom’s Public Policy head <a href="https://twitter.com/nasscom/status/1352200095735791617">shared </a>the suggestions the IT body has sent to the government. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">What Budget 2020 said </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Budget 2021 demand from NASSCOM </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ESOPs can be taxed within five years or when they leave the company or when they sell their shares, whichever is earliest. </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ESOPs should be taxed only when an employee sells the shares, when they have the liquidity. </td></tr></tbody></table> Entrepreneurs too agree. “Most startups, irrespective of the sector they operate in, typically take more than five years to list themselves in the stock exchange and become a listed company or carry out an exit or sell-out. Second, it does not apply to an employee who is exiting a company as an employee. So, a person who has already spent several years in a company and wishes to move on, his ESOPs earned during employment will not be eligible for deferment of taxes. In crux, I would urge the government to review these preconditions to support the startup industry at large,” said Ankit Prasad, Founder and CEO, Bobble AI. In the past year, multiple startups have been buying back shares from their employees as a way of rewarding them. Recent startups which rolled out ESOP buyback plans <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Swiggy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$7-9 million <a href="https://entrackr.com/2020/11/swiggy-to-reward-its-employees-with-esop-liquidity-program/">(reported value)</a> </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Unacademy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$4 million </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Urban Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$5 million </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Zerodha </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$8.7 million </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CRED </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$1.2 million </td></tr></tbody></table> However, Archit Gupta, founder and CEO of ClearTax believes that just deferment of tax isn’t enough, instead some exemption of tax on sale of ESOPs should be brought in. “It can become an effective means to attract and retain talent,” Gupta told Business Insider. But a crucial question still remains – who can avail this benefit? Aggarwal said the benefit should be extended to all startups and not just eligible startups. “DPIIT on its platform has over 40,000 startups but out of that only 400 are eligible startups, who have got an approval of certification for tax benefits,” he said. SEE ALSO: <a href="https://www.businessinsider.in/defense/news/us-new-president-joe-biden-will-oppose-new-delhis-5-5-billion-deal-with-russia-for-the-s-400-missile-as-per-washington-d-c-based-expert/articleshow/80382062.cms">INTERVIEW: Joe Biden may be as harsh as Donald Trump if India insists on buying S-400 missiles from Russia, says a Washington D.C-based expert</a> <a href="https://www.businessinsider.in/business/auto/news/bajaj-auto-just-posted-a-record-quarter-as-pent-up-demand-brings-highest-ever-sales-for-its-signature-bikes-pulsar-and-boxer/articleshow/80384430.cms">Bajaj Auto just posted a ‘record quarter’ as pent up demand brings highest ever sales for its signature bikes – Pulsar and Boxer</a>

NASSCOM says Budget 2021 should ensure ESOPs are taxed only when shares are sold

New Delhi, Feb 1 () Startups on Saturday welcomed the Budget proposal of relaxing ESOPs taxation, but said linking it to Section 80-IAC will limit its impact to a small section of startups.
"The relaxation for ESOP taxation was welcome but linking it to Sec 80-IAC makes it meaningless as it impacts only a 100 odd startups. We had requested for this to apply to all DPIIT (Department for Promotion of Industry and Internal Trade) registered startups. I do hope they correct that urgently," Indian Angel Network Chairman Saurabh Srivastava said in a statement.
During her Budget speech, Finance Minister Nirmala Sitharaman proposed easing of tax payments for startups - a decision which has been hailed by budding entrepreneurs.
"In order to give a boost to startup ecosystem, I propose to ease the burden of taxation on the employees by deferring the tax payment by five years or till they leave the company or when they sell, whichever is earliest," she said while presenting the Union Budget for 2020-21.
Employee stock option plan (ESOP) is a significant component of compensation for these employees, she said. Currently, it is taxable.
"This leads to cash flow problem for the employees who do not sell their shares immediately and continue to hold the same for long term," she said.
During their formative years, startups generally use ESOPs to attract and retain highly talented employees, she added.
Orios Venture Partners' Rehan Yar Khan said it is good that entry level capital gains had been differed to five year, exit or sale, whichever sooner. "Not Good: Yet need to pay entry level capital gains in 5 yrs if yet with company. The exemption only applies to Startups registered with IMB," he tweeted.
LocalCircles head Sachin Taparia tweeted: "This benefit seems to be extended to only startups incorporated after April 1, 2016. Needs to be extended to all startups that are eligible for #angeltax benefit. Also, need to make #esop taxable at sale without the 2 other conditions of 5 years or employee exit". SR BAL

Startups hail Budget for relaxing ESOPs norm

New Delhi, Feb 11 () Automobile portal CarDekho on Tuesday said it will offer an ESOP cash-out scheme worth USD 3.5 million (over Rs 24 crore) to about 100 of its current and former employees. CarDekho will allow eligible employees (current and former) to cash out 50 per cent of their vested options under Girnarsoft group's ESOP Exercise and Secondary Sale Plan, a statement said. "The current discretionary ESOP cash-out scheme is valid for both existing employees who have served 2 years and former employees who have served 4 years in the company and held vested options as of 31st January 2020," it added. The cash-out, estimated to be worth USD 3.5 million, is the second one this financial year, it added. The first ESOP cash out was announced in April last year, where Jaipur-headquartered CarDekho had bought ESOPs worth USD 2 million. "At CarDekho, we have always believed that our employees are our biggest asset and our most important investment. As technology is democratised its competitive advantages may diminish but it will be our employees who will continue to be our competitive advantage and key differentiating factor," CarDekho co-founder and CEO Amit Jain said. This scheme is merely a way of thanking the employees for their significant contributions and dedication, he added. Founded in 2008, CarDekho had recently raised USD 70 million in series D round to strengthen its transactional business and expand in Southeast Asia. Operating in India, Indonesia and the Philippine, the group operates various Indian auto portals such as CarDekho.com, Gaadi.com, ZigWheels.com, BikeDekho.com, InsuranceDekho.com, PowerDrift.com and others. SR SHWSHW

CarDekho to offer ESOP scheme worth $3.5 mn

(Eds: Adding word in header) New Delhi, Feb 11 () Automobile portal CarDekho on Tuesday said it will offer an ESOP cash-out scheme worth USD 3.5 million (over Rs 24 crore) to about 100 of its current and former employees. CarDekho will allow eligible employees (current and former) to cash out 50 per cent of their vested options under Girnarsoft group's ESOP Exercise and Secondary Sale Plan, a statement said. "The current discretionary ESOP (Employee Stock Ownership Plan) cash-out scheme is valid for both existing employees who have served 2 years and former employees who have served 4 years in the company and held vested options as of 31st January 2020," it added. The cash-out, estimated to be worth USD 3.5 million, is the second one this financial year, it added. The first ESOP cash out was announced in April last year, where Jaipur-headquartered CarDekho had bought ESOPs worth USD 2 million. "At CarDekho, we have always believed that our employees are our biggest asset and our most important investment. As technology is democratised its competitive advantages may diminish but it will be our employees who will continue to be our competitive advantage and key differentiating factor," CarDekho co-founder and CEO Amit Jain said. This scheme is merely a way of thanking the employees for their significant contributions and dedication, he added. Founded in 2008, CarDekho had recently raised USD 70 million in series D round to strengthen its transactional business and expand in Southeast Asia. Operating in India, Indonesia and the Philippine, the group operates various Indian auto portals such as CarDekho.com, Gaadi.com, ZigWheels.com, BikeDekho.com, InsuranceDekho.com, PowerDrift.com and others. SR SHWSHW

CarDekho to offer ESOP cash-out scheme worth $3.5 mn

New Delhi, Apr 17 () Digital payments major Paytm on Friday said it will offer employee stock ownership plan (ESOPs) worth Rs 250 crore this year. The exercise, which will be completed over the next 3-4 months, will include high performing employees as well as new hires, Paytm said in a statement. The company, however, did not disclose the number of employees it would cover, as the appraisal process is still on. Paytm had started its company-wide process of annual performance reviews in January this year. "This will widen the base of employees having company shares and will enable more people to become a stakeholder in the firm's growth story," the statement said. In October last year, the company had given existing and former employees the option of liquidating their vested ESOPs to earn about Rs 300 crore during a secondary share sale. "Paytm has a high-performance culture and follows a transparent process to evaluate and reward employees. We always ensure to provide ample growth opportunities and engage for feedbacks from time to time," Paytm CHRO Rohit Thakur said. Besides, Paytm also plans to hire over 500 people for multiple roles, apart from continued hiring for roles in product and technology teams, the statement said. The company has also decided to offer an extension of two months to employees who haven't performed well and would have been otherwise asked to leave. "As a part of the appraisal process, some employees were assessed to be at the lower end of the bell curve range. As a part of the year-end process, the company typically asks them to look for opportunities outside the organisation. "However, after analyzing the current scenario, Paytm has offered those employees to continue to be on the rolls of the company for another two months and receive all payments for this extended period," it said. The nationwide lockdown, which has now been extended to May 3, has disrupted businesses, especially start-ups. Many start-ups are facing financial stress given the paucity of business, and some of them are resorting to measures like salary cuts and even layoffs to tide over the ongoing crisis. Recently, self-drive mobility platform Zoomcar had said it has decided to defer salaries of senior leaders and CEO Greg Moran as part of its efforts to tide over the "difficult time" on account of the coronavirus crisis. Online used car marketplace CARS24 had said it has introduced a voluntary pay cut for employees that will be invested as ESOPs of the company. SR RVK

Paytm to give ESOPs worth Rs 250 cr; hire over 500 people to expand financial services

<ul><li>25% more sellers grossed sales over ₹1 crore as compared to last year’s <keyword id="2936509" type="PERSON" weightage="20" keywordseo="Prime-Day">Prime Day</keyword>.</li><li>Customers from over 96% pincodes of India placed their orders on Prime Day.</li><li>The company also revealed that more than 70% of new Prime members shop from outside of the top 10 cities.</li></ul>E-commerce firm <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword> hosted its annual 48-hour long ‘Prime Day’ sale earlier this week, in India, and it recorded the most small medium business (SMBs) selling on the e-commerce platform ever. Personal computing, beauty, apparel, home and kitchen, smartphones and pantry witnessed the highest number of sales, the company said in a statement. <table style="border-width: initial; border-style: none;"></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top Smartphones </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">OnePlus Nord 2 5G, One Plus Nord CE 5g, Redmi Note 10 series, Redmi 9, Samsung Galaxy M31s, Samsung Galaxy M21 and Realme c11 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Highest-selling TV </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Onida Fire TV </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top appliance </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">LG and Samsung in washing machines; Whirlpool and Samsung in refrigerators; Samsung in microwave in kitchen and home appliances. </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top selling apparel brands </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jockey, GoSriKi, Biba and Max </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top selling beauty brands </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nivea, Biotique, Dove, WOW, L’Oreal, Mamaearth, Himalaya, Vaseline, Parachute, Lakme and Nivea </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Alexa </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">One in every 10 smartwatches and one in every 6 smartphones sold this Prime Day was Alexa built-in. </td></tr></tbody></table> Prime members shopped from 1.26 lakh sellers, which included artisans, weavers, women entrepreneurs, startups and brands, local offline neighbourhood stores. Of these, 31,230 sellers saw their highest ever single day sales during the two-day sale and nearly 25% more sellers’ grossed sales over ₹1 crore as compared to last year’s Prime Day. The company has over 8 lakh sellers listed on its e-commerce platform. Customers from over 96% pincodes of India placed their orders on Prime Day. “We dedicated this Prime Day to SMBs and local stores and are humbled by their participation. Prime members shopped from more than 126,000 SMBs and stores from across over 6,800 pincodes, making it the biggest ever sales for SMBs on Amazon.in. We are also excited that the month leading up to Prime Day became Prime Video’s best ever viewership period, firmly establishing that India loves free, fast shipping, exclusive shopping and digital benefits that Prime offers,” said Akshay Sahi, director of Prime and Fulfillment Experience at Amazon India. The company also revealed that more than 70% of new Prime members shop from outside of the top 10 cities including towns like Anantnag in Jammu &amp; Kashmir, Bokaro in Jharkhand, Tawang in Arunachal Pradesh, Mokokchung in Nagaland, Hoshiarpur in Punjab, Nilgiris in Tamil Nadu, Gadag in Karnataka and Kasargod in Kerala. SEE ALSO <a href="https://www.businessinsider.in/tech/news/india-has-limited-options-for-weapons-that-can-take-down-enemy-drones/articleshow/84836724.cms">India has limited options for weapons that can take down enemy drones</a> <a href="https://www.businessinsider.in/politics/political-media/news/there-are-at-least-four-hot-issues-in-india-that-the-government-has-no-data-for/articleshow/84820788.cms">There are at least four hot issues in India that the government has no data for</a> <a href="https://www.businessinsider.in/business/news/ola-expands-esop-pool-to-3000-crore-issues-stock-worth-400-crore-to-employees/articleshow/84820171.cms">Ola expands ESOP pool to ₹3,000 crore, issues stock worth ₹400 crore to employees</a>

Amazon says that Prime Day 2021 was the best sale for small businsess, 1.26 lakh sellers participated

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