(1) Employee share scheme means any agreement or arrangement under which a company —

(a) may issue shares to any of its employees or employees of any of its associate companies; or

(b) may issue shares to the trustee of a trust and subsequently the trustee may issue such shares to any employee of the said company or any of its associate companies in accordance with the trust deed.

(2) If shares are received under an employee share scheme, in the year of receipt of shares, the income shall be added to income from employment as per A – B, where—

A = fair market value of the shares on the date of receipt;

B = cost of acquisition of shares.

(3) The cost of acquisition of shares referred to in sub-section (2) shall mean the sum of the following costs, namely:—

(a) if the employee has paid any price to acquire the shares;

(b) if the employee has paid any price for the right or opportunity to acquire shares.

(4) If the right or opportunity to acquire shares under the employee share scheme is sold or transferred by the employee, the income shall be added to the income from employment in accordance with formulae A – B, where—

A = sale or transfer price of the right or opportunity to acquire shares;

B = price paid for the right or opportunity to acquire shares.