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Across the world many corporations, particularly multinational organizations, now favour ESOP (employee stock ownership plan) as a preferred mode of employee compensation. Unlike the regular salary that the employee draws periodically, this is an in-kind benefit that allows the employee to own a part of the company (in the form of stock ownership) either while undertaking employment or as part of regular reimbursement. This gives the employee a personal interest in the business and maintains the corporate culture in the company. Similar to the ESOP, many corporations also award their employees SAR or Stock Appreciation Rights. These may be declared from time to time as incentives or as bonus. Usually the employee is allocated stock options of the company (at current market value) and can be redeemed anytime after a year (till the period of employment or within any other term specifically mentioned). This means that the amount of appreciation of a specific number of shares of t

Income Tax is a direct tax on any income earned by a person during a financial year. An individual is supposed to file a return of income and pay taxes on the same by 31 st  July of the next year. Paying taxes always seems like a burden to the common man. However, the issue synonymous to both  Direct and Indirect Taxes  that must be addressed is Chapter VI of the Income Tax Act, 1961 has offered a variety of deductions to lessen the tax burden. A few of the major deductions enlisted under Chapter VI are presented as follows in accordance with the recent updates. It is notable that these deductions cannot exceed the Gross Total Income of the individual. Section Description Maximum Deduction threshold 80C Contribution to LIC, RPF, NSS, Tuition fees, principal repayment for purchase/construction of residential house, Sukanya Samridhi Account, ULIPS/ELSS, 5-year FD, Subscription to NABARD Bonds 80C + 80CCC+ 80CCD (1) should be less than or eq