ESOP planner and tax calculator
Plan your ESOP pool and grants, see the vesting schedule, and estimate exercise cost, perquisite tax and capital gains, with a PDF grant summary.
10% pool: founders 90% → 81%
1,11,111 new option shares; 29,000 granted (26.1% of the pool), 82,111 left for future hires.
| Role | Options | Of pool | Of company |
|---|---|---|---|
| Founding engineer | 15,000 | 13.5% | 1.35% |
| Product designer | 6,000 | 5.4% | 0.54% |
| Sales lead | 8,000 | 7.2% | 0.72% |
Vesting: Founding engineer, 15,000 options
Full vesting table (37 events)
| Date | Month | Vests | Total vested |
|---|---|---|---|
| Apr 2027 (cliff) | 12 | 3,750 | 3,750 (25%) |
| May 2027 | 13 | 312 | 4,062 (27.1%) |
| Jun 2027 | 14 | 313 | 4,375 (29.2%) |
| Jul 2027 | 15 | 312 | 4,687 (31.2%) |
| Aug 2027 | 16 | 313 | 5,000 (33.3%) |
| Sep 2027 | 17 | 312 | 5,312 (35.4%) |
| Oct 2027 | 18 | 313 | 5,625 (37.5%) |
| Nov 2027 | 19 | 312 | 5,937 (39.6%) |
| Dec 2027 | 20 | 313 | 6,250 (41.7%) |
| Jan 2028 | 21 | 312 | 6,562 (43.7%) |
| Feb 2028 | 22 | 313 | 6,875 (45.8%) |
| Mar 2028 | 23 | 312 | 7,187 (47.9%) |
| Apr 2028 | 24 | 313 | 7,500 (50%) |
| May 2028 | 25 | 312 | 7,812 (52.1%) |
| Jun 2028 | 26 | 313 | 8,125 (54.2%) |
| Jul 2028 | 27 | 312 | 8,437 (56.2%) |
| Aug 2028 | 28 | 313 | 8,750 (58.3%) |
| Sep 2028 | 29 | 312 | 9,062 (60.4%) |
| Oct 2028 | 30 | 313 | 9,375 (62.5%) |
| Nov 2028 | 31 | 312 | 9,687 (64.6%) |
| Dec 2028 | 32 | 313 | 10,000 (66.7%) |
| Jan 2029 | 33 | 312 | 10,312 (68.7%) |
| Feb 2029 | 34 | 313 | 10,625 (70.8%) |
| Mar 2029 | 35 | 312 | 10,937 (72.9%) |
| Apr 2029 | 36 | 313 | 11,250 (75%) |
| May 2029 | 37 | 312 | 11,562 (77.1%) |
| Jun 2029 | 38 | 313 | 11,875 (79.2%) |
| Jul 2029 | 39 | 312 | 12,187 (81.2%) |
| Aug 2029 | 40 | 313 | 12,500 (83.3%) |
| Sep 2029 | 41 | 312 | 12,812 (85.4%) |
| Oct 2029 | 42 | 313 | 13,125 (87.5%) |
| Nov 2029 | 43 | 312 | 13,437 (89.6%) |
| Dec 2029 | 44 | 313 | 13,750 (91.7%) |
| Jan 2030 | 45 | 312 | 14,062 (93.7%) |
| Feb 2030 | 46 | 313 | 14,375 (95.8%) |
| Mar 2030 | 47 | 312 | 14,687 (97.9%) |
| Apr 2030 | 48 | 313 | 15,000 (100%) |
If all 15,000 are exercised
- Exercise cost
- ₹1.5 L
- Perquisite (taxed as salary)
- ₹36 L
- Tax at exercise (est.)
- ₹12.6 L (35%)
- Cash needed at exercise
- ₹14.1 L
If sold at ₹1,200 a share
- Capital gain
- ₹1.43 Cr
- Long-term gains tax (est.)
- ₹18.53 L
- Sale proceeds
- ₹1.8 Cr
- Net after cost and both taxes
- ₹1.47 Cr
Unlisted shares are long term after 24 months from allotment; this sale is taxed at 12.5% (long term, no indexation), plus 4% cess. Surcharge, the ₹1.25 lakh exemption used elsewhere, and set-off of losses are not modelled.
Startups with DPIIT recognition and the inter-ministerial board certificate can let employees defer this tax. Select “Yes” above if that applies.
Estimate, not tax advice. Real tax depends on the FMV valuation report, the grant letter and ESOP scheme, the employee’s other income and residency. Sources are listed below.
A little guidance.
How to use ESOP planner and tax calculator
- Set the pool size and your current shares to see how much the pool dilutes the founders, then list grants by role.
- Pick a grant to see its vesting timeline (1-year cliff, then monthly or quarterly) and the full vesting table.
- Enter the exercise price, FMV, salary and expected sale price to estimate exercise cost, perquisite tax and capital gains, then download the grant summary PDF.
Formats and compatibility
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Limitations
Estimate under current Indian rules. Actual tax depends on the FMV valuation report, the grant letter, your other income and residency. Not tax advice.
Questions, answered.
Is ESOP planner and tax calculator free?
Yes. ESOP planner and tax calculator is free to use with no sign-up, no watermark and no daily limit.
How are ESOPs taxed in India?
Twice. When you exercise, the difference between the fair market value and your exercise price is taxed as salary (a perquisite) at your slab rate. When you sell, the gain over that FMV is a capital gain: for unlisted shares, long term after 24 months at 12.5%; for listed shares, long term after 12 months at 12.5% above ₹1.25 lakh, or 20% if short term.
Can startup employees defer ESOP tax?
Yes, if the company is an eligible startup (DPIIT-recognised with the inter-ministerial board certificate for the tax holiday). Tax on the perquisite can be paid later: at the earliest of a fixed period after the tax year of allotment, the sale of the shares, or leaving the company. It is a deferral, not an exemption; confirm eligibility with your employer.
What is a 1-year cliff with 4-year vesting?
Nothing vests in the first 12 months. On the first anniversary 25% vests at once, and the rest vests monthly or quarterly over the next three years, so the full grant is yours after four years.
How big should an ESOP pool be?
Early-stage Indian startups commonly keep 5–15% of the company in the pool, sized to the next 18–24 months of hiring. A pool created before a round dilutes only the existing shareholders, so negotiate its size with your actual hiring plan.
Is my data sent anywhere?
No. Everything you enter is processed in your browser and is not sent to a server.
Does it work on mobile phones?
Yes. It runs in any modern browser on Android, iPhone, Windows, Mac and Linux. Large files are faster on a computer.
What are the limitations?
Estimate under current Indian rules. Actual tax depends on the FMV valuation report, the grant letter, your other income and residency. Not tax advice.
Sources and last check
We list every rate, limit and date this page relies on, where it comes from and when we last checked it. Rules change: please confirm on the official website before you act. Spotted something out of date? Tell us.
- ESOP tax: perquisite at exercise and the eligible-startup deferralVerified 14 Oct 2026
When an employee exercises options, FMV minus the exercise price is a salary perquisite and the employer deducts TDS. For employees of an eligible startup (DPIIT-recognised and holding the inter-ministerial board certificate for the startup tax holiday), payment of this tax can be deferred until the earliest of a fixed period after the tax year of allotment (48 months under the 1961 Act; commentaries differ on the period under the Income-tax Act 2025), sale of the shares, or leaving the company. It is a deferral, not an exemption. Check the current period and your company’s eligibility with a CA.
Startup India: section 80-IAC tax exemption (IMB certificate) · K&S Partners: ESOP two-stage taxation and the startup deferral · TaxGuru: taxation of ESOPs · Income Tax Department
- Capital gains tax on shares, tax year 2026-27Verified 14 Oct 2026
Rates in force for transfers from 23 July 2024 and unchanged in Budget 2026. Listed shares (STT paid): long term after 12 months, 12.5% above ₹1.25 lakh a year; short term 20%. Unlisted shares: long term after 24 months, 12.5% without indexation; short term at slab rates. For ESOP shares the holding period usually starts at allotment and the cost is the FMV taxed as a perquisite. Surcharge and cess apply; section numbers changed under the 2025 Act.
Business Standard: tax rates and holding periods for all assets · Groww: taxation of unlisted shares · Income Tax Department
- Income tax: new regime, tax year 2026-27Verified 13 Oct 2026
The Income-tax Act 2025 applies from 1 April 2026 and uses "tax year" in place of FY/AY. Rebate (now section 156) and marginal relief apply to resident individuals.
Union Budget 2026: slabs unchanged · Rebate under section 156, Income-tax Act 2025 · Income Tax Department
- Income tax: old regime, tax year 2026-27Verified 13 Oct 2026
Deduction caps shown use the familiar limits (investments ₹1.5 lakh, home-loan interest on a self-occupied house ₹2 lakh, additional NPS ₹50,000). Section numbers changed under the 2025 Act.
- Valuation reports when a private company allots sharesVerified 14 Oct 2026
In general, an unlisted company issuing shares on a preferential basis prices them using a registered valuer’s report under the Companies Act. If the investor is a non-resident, FEMA pricing rules also apply, and fair value is usually certified by a chartered accountant, a SEBI-registered merchant banker or a practising cost accountant. Tax rules may need their own valuation. Exact requirements depend on the instrument and the facts; confirm with your CS or CA.
Companies (Share Capital and Debentures) Rules 2014, rule 13 (preferential allotment) · RBI Master Direction: Foreign Investment in India (pricing guidelines) · ICAI Palakkad: issue of shares on preferential basis
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