Cut Foreign ESOP Tax From 40% To 12.5%: Expert Tips For Retirement Planning

• Employees with foreign ESOPs face tax challenges, especially nearing retirement and losing access to company demat accounts.
• Foreign company shares are considered unlisted for Indian tax purposes, impacting tax rates based on holding period.
• Short-term capital gains (shares sold within 24 months) are taxed at individual slab rates, potentially up to 40% for high earners.
• Long-term capital gains (shares held over 24 months) are taxed at a flat 12.5%, significantly reducing the tax burden.
• Transferring shares to a personal international demat account does not trigger tax; tax is only applicable upon sale.