Founders Tax Desk.

Our work in this practice

The Founders Tax Desk addresses the personal tax position of founders, senior executives, and UHNIs. The personal tax profile of this group is structurally distinct from typical individual taxpayers: substantial equity-based compensation through ESOPs and RSUs, periodic secondary or exit liquidity events with material capital gains, cross-border holdings and income flows, family wealth held through HUF or Private Family Trust structures, and multi-year wealth planning horizons.

Our practice provides integrated personal tax advisory across these dimensions, with the underlying objective of structural tax efficiency consistent with full statutory compliance. The advisory is calibrated to the individual's profile, life stage, family structure, and wealth trajectory, with attention to both immediate tax position optimisation and the long-term wealth architecture.

ESOP and RSU exercise planning is the most common workstream. ESOPs are taxed under Section 17(2)(vi) on the perquisite differential at exercise (FMV at exercise less exercise price), as salary income subject to applicable income tax rate. The subsequent sale is taxed as capital gain under Section 45, with cost basis being the FMV at exercise. The exercise decision involves multiple considerations: immediate cash tax outflow versus future tax efficiency at sale, personal cash flow capacity, LTCG classification timing (12-month holding period for unlisted shares; 12-month for listed shares), and integration with the individual's overall income position.

Secondary and exit capital gains is the workstream for founders and executives realising liquidity through secondary sales or exit transactions. The LTCG rate on listed equity shares is 12.5% under Section 112A (as applicable from FY 2025-26 onwards, with grandfathering provisions for pre-July 23 2024 acquisitions), and 12.5% on unlisted shares under Section 112 (with indexation benefit removed from FY 2024-25 onwards for most asset classes). STCG rate is 20% for listed shares under Section 111A and the applicable income tax slab rate for unlisted shares.

Income Tax Returns for founders and UHNIs typically require ITR-2 or ITR-3 with the full Schedule complement including Schedule CG (Capital Gains), Schedule OS (Other Sources), Schedule FA (Foreign Assets), Schedule AL (Assets and Liabilities for high-income individuals), and Schedule ESOP where applicable. Our annual ITR practice covers the full filing with documented supporting positions, attention to consistency across years, and structured reconciliation against Form 26AS and the Annual Information Statement.

Hindu Undivided Family is the traditional Indian structure for family wealth holding, with HUF treated as a separate taxable person from individual family members. Private Family Trust is the contemporary alternative providing greater flexibility, more sophisticated structural options, and clearer alignment with cross-border and complex family arrangements. The Private Trust framework under the Indian Trusts Act 1882 provides for settlor, trustees, and beneficiaries, with the trust having its own tax personality. Trust taxation can be at the trustee level (Section 161) or beneficiary level.

Cross-border holdings for founders with foreign shareholding, foreign investments, or foreign retirement accounts require integrated advisory across Indian and foreign tax regimes. Schedule FA disclosure is mandatory and subject to substantial penalty exposure for non-disclosure. Estate planning is the long-horizon workstream for founders and UHNIs with substantial wealth and family considerations, covering wills, gifts during lifetime, family settlements, and Trust structures for multi-generational wealth transfer. India does not currently have estate duty, but gift tax considerations and foreign jurisdiction estate tax positions require attention.

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