Mumbai: The government will soon issue guidelines on determining fair market value of stock options given by companies to their employees for calculating fringe benefit tax, finance minister P Chidambaram said.

"Guidelines (on fair market value) would be issued shortly," he told reporters after a conference of Income Tax chief commissioners.

Chidambaram had earlier said the fringe benefit tax on ESOPs would be calculated at the time of vesting the options to the employees and not at the time of allotment as was originally proposed in the budget.

In the budget for 2007-08, he had proposed that the fair market value of the fringe benefit would be determined in accordance with a prescribed method, on the date of exercise of the option.

It had proposed to include any specified security or sweat equity shares allotted by a company to its existing or former employees within the ambit of FBT.

However, this proposal was changed when the Finance Bill was passed in Parliament. The fair market value would now be determined when the company entitles an employee to get ESOPs at any later date.

This could bring relief to employers in a rising stock market, as value at the time of vesting is generally lower than the value at the time of allotment. But in a volatile or falling market, the FBT amount would increase.

Chidambaram also appeared confident of eliminating revenue deficit by 2008-09, even as he begged to differ with the prime minister''s advisory council that felt the task was difficult.

"I think so," he replied to reporters when asked whether revenue deficit targets under the Fiscal Responsibility and Budgetary Management (FRBM) Act would be met.

Commenting on EAC''s report, Chidambaram said the council did not say that the target would not be met, but only talked about difficulty in achieving the target. "There is subtle difference between difficult to meet and would not be met," he said after a meeting with chief commissioners of income tax.

FRBM Act has targeted revenue deficit to be wiped out by 2008-09. It was 2 per cent in 2006-07.

"We have been right so far (in meeting revenue deficit target), there is no reason why we should be wrong next year," he said.

EAC had yesterday said that while fiscal deficit reduction is on course to achieving the target, it would be difficult to phase out the revenue deficit by 2008-09.

The revenue deficit is targeted to be cut to 1.5 per cent of GDP in the current fiscal and eliminating it in one year would seem to be infeasible, EAC had said.

The finance minister also expressed confidence that target of reducing fiscal deficit to 3.3 per cent of GDP as well as collecting Rs2,67,490 crore direct tax revenues would be met this fiscal. "Whatever I have proposed in the budget, I will achieve it," he said.

He said total direct tax collections for the first three months stood at Rs41,154 crore. "We are on target. I am confident that the targets (of direct tax collections this fiscal) would be achieved."

Asked whether the targets would be exceeded, he said: "budget estimates are non-negotiable. They (tax officials) will collect that. Anything more than that, I will welcome."

Corporation tax collection is estimated to grow at 17.44 per cent to touch over Rs1,68,400 crore, while personal income tax is targeted to rise by 14.5 per cent to stand at over Rs 98,770 crore this fiscal.

Overall direct tax collections are estimated to grow by 16.31 per cent at Rs2,67,490 crore this fiscal.