Article

Tax Playbook for the Startup Ecosystem (May 2026)

Startup India, DPIIT · startupindia.gov.in Free Beginner India

The government's own May 2026 summary of startup tax benefits under the Income-tax Act 2025, including the ESOP deferral: employees of an eligible startup with the IMB certificate pay the exercise tax within 14 days of the earliest of 60 months from the end of the tax year, selling the shares, or leaving.

  • The ESOP tax deferral runs up to 60 months from the end of the tax year, not 48.
  • It applies only where the employer is DPIIT-recognised and holds the IMB certificate.
  • Selling the shares or leaving the company ends the deferral early.
Open on startupindia.gov.in ↗

Curated reading that points you to the sources, not personalised investment advice.

The question it answers

  1. Can I defer the tax on my ESOPs because my company is DPIIT-recognised?

Read with it

  1. The most thorough plain-language reference on vesting, cliffs, strike prices, and exercise windows. Read it once and stop being... Holloway Guide The Holloway Guide to Equity Compensation Holloway
  2. The India-specific piece: perquisite tax at exercise, capital gains at sale, and the startup deferral, with worked examples in... ClearTax Article How ESOPs are taxed in India ClearTax
  3. A plain-language India primer on what an ESOP actually is, how vesting and exercise work, and how it is taxed. ClearTax Article What is an ESOP? Meaning, taxation, and how it works ClearTax
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