# ITAT rules Flipkart ESOP buyback is capital gain, not salary 2026-08-13T00:43:48+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet Livemint reports that the Bengaluru Income Tax Appellate Tribunal (ITAT) held that Rs 2.33 crore received by a Flipkart executive for repurchasing vested but unexercised employee stock options (ESOPs) should be taxed as long-term capital gains (LTCG) at 12.5%, not as salary perquisite at slab rates above 30%. The tribunal reasoned that until an employee exercises the option and receives shares, they hold only a contractual right, a capital asset, not a salary benefit. Under Section 17(2)(vi), the ESOP benefit is taxed as salary only when shares are actually allotted. Experts caution that this does not give employees a free choice: the company must structure the transaction as a repurchase and cancellation of options. The tax department could also invoke GAAR or specific buyback rules to challenge the arrangement. ## Coverage - livemint.com Tags: Capital gains, employee stock options, ESOP, Flipkart, ITAT, tax ruling Canonical: https://indianopinion.org/itat-rules-flipkart-esop-buyback-is-capital-gain-not-salary/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/itat-rules-flipkart-esop-buyback-is-capital-gain-not-salary/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes.