Union Budget 2026: Esops tax pause may be opened to more startups

The Centre is considering widening the four-year Esop tax deferral to cover all DPIIT-recognised startups, significantly expanding a benefit that currently applies to around 4,000 firms approved by an inter-ministerial board. Extending the deferral would ease cash flow pressure on employees and make stock-based compensation more viable as more startups scale, restructure, and prepare for IPOs.