India, Jan. 6 -- With the Union Budget 2026-27 around the corner, the government is reportedly considering extension of four-year tax deferral on employee stock option plans (ESOPs) to all the startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).

Citing sources, ET reported that officials are looking into the issue ahead of the Budget and the final decision will be made after deliberations. Notably, the option of four-year tax deferral, which was introduced in 2020, is currently limited to over 4,000 startups certified by the Inter-Ministerial Board (IMB).

If the policy materialises, more than 1.97 Lakh startups recognised by the DPIIT will have an option to defer tax on ESOPs.

Currently, when an e...