ESOPs serve as an important employee retention tool for startups, which often struggle to attract and retain top talent due to limited resources.

Typically offered as part of the employee benefit plan, ESOPs not only enable startups to preserve their cash outflow but also boost employee morale.

At present, startup employees who opt for ESOPs are required to pay taxes twice – first when they sign up for ESOPs and then again when they redeem their shares.

Even though the five-year tax holiday on ESOPs is a positive step, dual taxation remains a major concern area.

Finally, ESOPs for startups should not be taxed at a higher rate than listed stocks to create a level playing field. | To read full story, visit https://startuparound.com/read/1581801268.514307/Tax-Deferred-On-ESOPs-By-5-Years:-What-It-Means-For-Startups?ref=audio_experience