A start up is contemplating issuing ESOP to its employees in order to retain them and connect them financially with the valuations that the Company can achieve. As an alternative, it is also evaluating a plan for granting Stock Appreciation Rights (SAR) to the employees. The following details are available:

Value per share on the date of grant of ESOP/SAR Rs 250

Vesting time 2 years

Lock in after vesting 2 years

Amount payable by employee for acquiring ESOP Nil

Expected price after 4 years Rs 750

You are required to study the provisions of Companies Act 2013 and the Income Tax Act 1961 and evaluate the most tax efficient option both for the employee and the employer.