FMV
Also known as: Fair Value, Market Value
Fair Market Value - The price at which shares would trade between willing buyers and sellers in an open market.
Detailed Explanation
FMV (Fair Market Value) is crucial for ESOP/RSU taxation in India. For unlisted companies, FMV must be determined by SEBI-registered merchant bankers using prescribed valuation methods. FMV is used to calculate perquisite tax and becomes the cost basis for capital gains. Regular valuation updates are essential for accurate tax calculations.
Related Calculators
Related Terms
ESOP
Employee Stock Option Plan - A benefit plan giving employees the right to buy company shares at a predetermined exercise price.
RSU
Restricted Stock Units - Company shares granted to employees that vest over time and are taxed as salary when vested.
Perquisite Tax
Tax on employment benefits valued in money, including ESOP exercise gains and RSU vesting, taxed as salary income.
Exercise
The act of purchasing ESOP shares by paying the exercise price, triggering perquisite tax liability.