Employee stock options: Postpone sale of shares if firm plans to list

Extend holding period so that you pay tax on long-term capital gains as it will reduce the outgo

Employee stock ownership plans (ESOPs) are in the news, what with current and former Paytm employees converting their ESOPs to shares worth Rs 182 crore and Ola expanding its pool to Rs 3,000 crore ahead of the firms’ initial public offerings (IPO).

ESOPs are an important employee retention tool for start-ups in their early days when they can’t afford to pay huge salaries. Many such start-ups have now turned into unicorns with valuations constantly on the rise. Their employees are now faced with the question of when to exercise their options and when to sell them, as each of these actions