Legal · Commerce & Consumer Brands

Flipkart tax and land deals face scrutiny

By Startup Enthusiast · 7 August 2026

What they do

Flipkart operates a major Indian e-commerce marketplace for electronics, fashion, and groceries

A tax tribunal ruled that unexercised ESOP buybacks are capital gains, not salary income

Separately, an audit report identified a financial loss in a land deal for a distribution center

The Income Tax Appellate Tribunal (ITAT) ruled that money from ESOP (Employee Stock Option Plan) buybacks is taxable as capital gains if the options were never exercised.
The ruling involved a former employee who received ₹2.33 crore for unexercised vested options.
The tax department had argued the amount was salary perquisite because it was linked to employment.
The tribunal held that no perquisite exists if shares are never allotted or exercised.
Separately, the CAG (Comptroller and Auditor General) reported a ₹12.86 crore loss for the state in a land deal with Instakart Services.
The loss occurred because the land price was calculated incorrectly by including unusable water bodies in the allocable area.

The ITAT ruling provides a persuasive precedent for employees facing similar tax disputes over unexercised stock options.
The CAG report highlights administrative lapses in land allocation for industrial projects in West Bengal.

Flipkart is a leading Indian e-commerce platform offering a wide range of products including electronics, fashion, and groceries.