FMV in ESOP allowed

The Mumbai Bench of the Income Tax Appellate Tribunal, by its order dated 31 July 2026, allowed the appeal of a UK-resident non-resident employee and held that the fair market value of ESOP shares on the date of exercise must be adopted as the cost of acquisition under Section 49(2AA). 

The Tribunal rejected the Revenue's view that only the actual exercise price could be considered for computing capital gains.