The accepted and widely used definition on Wall Street is:
ßL = ßu * [1 + (D/E) * (1 – T) ]
Which works out algebraically to the same as the one you listed for Damodaran.
In short, this means that the ßL is higher than ßu by a factor equal to D/E ratio (tax-effected) since debt introduces more volatility into earnings.
Rohit, this concept is fundamental to Corporate Finance and we have covered it extensively in our Finance 101 course and Corporate Valuation/Corporate Finance course. Please go here for more information:
Finance 101: http://www.wstselfstudy.com/package1-1.html
Corporate Valuation: http://www.wstselfstudy.com/package2-1.html
and just for asking smart questions, we'll give you 10% off: use discount code elearning