Mystery of ESOP's

Economic times has a interesting article on ESOP's.

The article quotes that " The Budget provisions provide that the value of the fringe benefit would be the difference between the fair market value of the share on the date of exercise of the option and the amount actually paid by the employee towards such shares." As is to be expected the language is vague to the extreme.

We can understand Finance Ministers inclination to earn more money (Without bothering about how well the money is spent) through participating in gains that ESOP holders get but we also think that this point is more likely to misused.

Now it is also our fervent hope that Fin Min clarifies the guidelines for once & all. For average employee though, this is a cruel blow. Companies shall now be even more reluctant to offer ESOP's as the the tax they have to pay will increase with their success.