While working at an Indian branch of a company based in US, I got some Restricted Stock Units vested couple of times.

Earlier times (Scenario S1), all the stocks (Say I got 100 stocks vested) would be given to my stock account and the Perquisite tax (Say it was Rs.10000) would be collected from my monthly salary in INR.

Later times (Scenario S2), Perquisite tax would be taken in the form of stocks. Meaning, out of 100 vested stocks, I would get only 90 into my stock account and nothing would be taken from my monthly salary.

Question 1:
In S1, I think the tax money goes to Indian government. In S2, How does Indian government get the tax money ?

Question 2:
When I sell the stocks (say after 4 years), should I pay tax any more tax ?

Question 3:
Which Scenario (S1 or S2) is better for Employees ? I think this depends on whether the Stock Price goes up or down.

Question 4:
What tax should I pay for the Dividends which are accumulating in my stock account but not yet transferred to my Indian Bank ?