There is no ltcg tax on ESOP as it is just option. You need to exercise it to convert it to equity / shares, selling which will be subjected to capital gain tax.
So, there are two taxes involved here. Firstly, when you exercise esop, you pay tax (same as salary) on the value of equity you got from exercising esops. This tax you pay immediately while exercising. So, basically you are paying tax from your pocket because there is no money being paid by company, they cannot deduct tds. Company may ask to you pay money for tds.
Secondly, after converting to equity, depending on how long you held equity (and not since you were issued esop), you may need to pay short term or long term capital gain (stcg or ltcg). For example, you were issued esop on 1st Jan 2019. Now you exercised them on 1st Jan 2022. If you sell equity between 1st Jan 2022 and 31st March 2022, you will pay stcg. If you sell, you will pay ltcg. Also, there might be some variation based on if company is listed or not or blah blah. So, read clauses well.
Now, coming back to saving tax by gifting esops. Does your company allow transferring ESOPs? Or can they issue equity in someone's name? There is no way to escape first tax. You will have to pay based on fair value of equity as decided by company. Secondly, for stcg and ltcg, there is no tax slab. It is same percentage. So, there may not be any saving there.
i will suggest to talk a good CA. All the best.
Addendum - So, how much tax are we talking about. Let's say you exercise esop with fair value of 10L in year which you have to 30 lakh salary income, you will immediately pay 3.3 lakh tax extra. Remember, you have not made any money here. You just got equity. Now, when you sell equity for say 12 lakh after one and half year, your gain is 2 lakh, which will be taxed at 15% (ltcg if listed company). So, you will pay 30 thousands approximately. What if equity price go down to 8L and you decide to sell, that is story for another night. 🙂
