New Delhi, Aug. 12 -- A 30 July tax ruling involving a Flipkart employee could have implications for how employees cash out vested employee stock options (Esops).

The Bengaluru bench of the Income Tax Appellate Tribunal (ITAT) ruled that Rs.2.33 crore received by Flipkart executive Pramod Kumar Jain when the company repurchased his vested but unexercised Esops should be taxed as long-term capital gains (LTCG), rather than as salary perquisite.

This distinction is important because the tax treatment of the two routes differs significantly. While perquisites are taxed at slab rates, which are over 30% for such large payouts, LTCG tax is just 12.5%.

The Flipkart employee held vested Esops and had the right to buy shares in the future at a...