#ESOP deduction

ITAT Delhi held that the discount on employee stock options is a deductible expense under Section 37(1) of the Income Tax Act, treating it as a composite expense under Section 57. Companies can now claim the ESOP discount against taxable income, reducing tax outgo. This benefits firms that grant ESOPs.

ITAT Bangalore rules that ESOP cross-charges from a foreign parent to its Indian subsidiary qualify as revenue expenditure under Section 37, overturning the disallowance of ₹721 crore. The decision clarifies that employee compensation costs, even when recharged, are deductible if incurred wholly for business purposes, impacting multinational tax structures.