The Department for Promotion of Industry and Internal Trade (DPIIT) have begun talks with the Ministry of Finance on taxing shares granted by startups under their employee stock option plan (Esop) only at the time of sale, reported The Economic Times.

As per the report, the decision is part of the government’s strategy to transform India into a Startup hub.

Currently, Esops are taxed, as income, when employees exercise their options and convert them to shares.

“We have recommended that Esops be taxed when the actual sale happens,” a senior government official was quoted as saying in the report.

According to the report, the ministry will examine the matter when it looks at the proposal in the next Union Budget.