ESOP buyback payouts will be taxed as capital gains, not salary

The Income Tax Appellate Tribunal (ITAT) in Bengaluru has ruled that vested employee stock options are not taxable as salary until they are exercised. It said money received from the repurchase of unexercised vested stock options should be taxed as long-term capital gains, not salary. The ruling came in a Flipkart executive's case involving a ₹2.33 crore payout.