No TDS on ESOP scheme: Narayana Murthy

BANGALORE: Infosys Technologies Limited chairman and chief

executive officer N. R. Narayana Murthy on Monday said that his company would

not accept any tax liability on account of its Employee Stock Option Scheme

(ESOP). On October 08, Infosys received a demand from the Income Tax Department

for Rs 62.41 crores towards income tax and Rs 9 crore towards interest for

non-deduction of the tax deductible at source on the Stock Options issued to its

employees.

In a release, Mr Murthy said,"The taxability of the

Stock Options has been agitated before the Income Tax Authorities for the last

four years. The company has received legal opinion that it would have no tax

liability on its ESOP Scheme. Infosys is closely studying the implications of

the demand notice and is seeking appropriate legal advice. The current demand

would have no material impact on its earnings as any tax liability on the stock

issued under the ESOP is adequately covered by indemnities from its employees

and by the stock exercisable by them under the ESOP."