## Employees Stock Option Plan (ESOP) / Sweat Equity Shares
When an employer offers its own company's shares to employees at a concessional (below-market) price, the benefit is a taxable perquisite in the hands of the employee.
### Taxable Value
> Perquisite Value = FMV on the date of exercise of option – Issue Price (amount paid by employee)
### Key Concepts
- Grant date: Date employer offers the option — no tax implication.
- Vesting date: Date the right becomes exercisable — no tax implication.
- Exercise date: Date employee accepts and pays for shares — this is the trigger for perquisite taxation.
- FMV for listed shares is computed as per prescribed rules (average of opening and closing price on the recognized stock exchange on the exercise date).