What your options are worth on paper is not what you keep in hand. Exercise an ESOP in India and you usually face two tax bills: salary tax on the “perquisite” the moment you exercise, and capital-gains tax when you sell. This calculator shows the cash you need on exercise day and what is left after tax when you sell.
ESOP tax calculator (India)
Estimate what an ESOP exercise costs you in cash today, and what is left after tax when you sell. Enter your own numbers and the tax rates that apply to you. Everything stays in your browser.
Want the reasoning behind the numbers? Read the full explainer, ESOP Double Taxation in India and the IMB Timing Trap, which covers the IMB trap, what to check before you exercise, and what a clean ESOP policy looks like.
Common questions
How is an ESOP taxed in India?
There are usually two tax events. First, salary tax on the perquisite when you exercise the option, on the gap between the fair market value and the price you pay. Second, capital-gains tax when you sell the shares. The calculator above works out both.
What is the perquisite tax on ESOPs?
It is (fair market value at exercise minus exercise price) multiplied by the number of shares, taxed at your marginal salary rate. Note it is charged on the full spread, not on the cash you pay to exercise.
Do I pay tax when the options vest?
No. Vesting alone usually does not create a tax event in India. The tax event is exercise, when the shares are actually issued to you.
Can the ESOP tax be deferred in India?
Eligible startups can defer the perquisite tax under the government scheme, but it becomes payable at the earliest of the scheme period ending, selling the shares, or leaving the company. Deferral is a delay, not relief.
Raising a round too? Our cap-table and dilution calculator shows who owns what after a priced round.