Calculate vested stock options, phantom shares value, exercise costs, and employee share scheme salary taxation under SECP rules and Pakistani tax law.
Vested Options Ratio:
62.5% (62,500 of 100,000 Shares)
Unvested Balance (Subject to Forfeiture):
37,500 Shares (37.5%)
Gross Market Value of Vested Shares:
PKR 8,125,000
Total Cash Exercise Cost (Strike Price):
PKR 3,125,000
Pre-Tax Net Equity Gain (Intrinsic Value):
PKR 5,000,000
Estimated ITO 2001 Section 14 Exercise Tax:
PKR 1,925,000 (38.5%)
Net Post-Tax Cash Proceeds to Executive:
PKR 3,075,000
Statutory Tax Rule (Section 14, Income Tax Ordinance 2001): In Pakistan, the grant of an employee share option is not a taxable event. However, upon exercise, the difference between the fair market value of the shares and the exercise price paid is treated as taxable salary income under Section 12, subject to payroll tax withholding under Section 149. Subsequent appreciation upon sale of shares is taxable as Capital Gains under Section 37 or 37A.
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