ESOP expenses, as well as other charges that may be incurred in the normal course of business, would qualify as tax deductions under Section 37 of the Income Tax Act, provided the expenses are in revenue terms and incurred exclusively for business purposes. Various judicial precedents have made clear that ESOP expenses would fall under the category of compensatory expenses relating to... https://www.skmcglobal.com/blog/whether-esop-and-regulatory-charges-to-be-treated-as-allowable-expenses-under-section-37