What is ESOP?

ESOP or Employee Stock Ownership Plan is scheme under which eligible employees acquire ownership of their company shares. These are classified under Primary Market Transaction as they acquired directly from the Company.

How to exercise ESOP option?

The process of acquiring ESOP shares differ from Company to Company. You need to first decide the status, NRE or NRO, in which the shares needs to be acquired (if an option is provided by the Company). If you decide to acquire the shares in NRE mode, the payment then needs to be made from a NRE bank account or from foreign funds. If you decide to acquire under Non Repatriable or NRO mode, the payment can then be made from a NRO account. You will also be required to provide the demat account details to enable your company transfer the shares. The type of demat account,  NRE or NRO, again depends upon the mode of acquisition. Navia will help you set up the required demat account to enable you get the shares deposited to your account.

Can I sell my ESOP shares?

You can sell your ESOP shares any time, provided there is no lock-in period. To sell them online, you may just log in to your trading account and execute a sale transaction. You will receive the contract note at the end of the date with the details of the trade executed for the day.

Should I provide any details to get the credit of ESOP share sale amount to my bank?

Yes, your ESOP allotment information with details of date of allotment, rate of allotment, RBI approval number (for NRE shares), tax payment details (if any), Auditor's Certificate, along with other details, which might be required from time to time, needs to be provided to get the credit of the sale proceeds. If you need assistance in obtaining Auditor's Certificate, Navia can help you. 

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