The government had proposed in the Budget charging fringe tax on the value of shares or sweat equity allotted to employees by a company free or at concessional rates.
But the tax authorities had not firmed the rules for valuation of such benefits so far.
The fair market value of stock options for tax computation will be the average of the opening and closing price of a firm's share on the day the option vests, Finance ministry Spokes person said in a statement on Tuesday.
"In a case where, on the date of the vesting of the option, the share in the company is listed on a recognised stock exchange, the fair market value will be the average of the opening price and closing price of the share on that date on the said stock exchange," it said.
Source: Reuters
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