Valuation Requirement under Income Tax
24/03/2021 Financial & Legal Services
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Description
As per Section 56(2)(viib), where a private company receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value (FMV) of the shares shall be chargeable to income tax under income from other sources.
FMV as on the valuation date (VD) for issuance of shares shall be the value —
as may be determined in accordance with Rule 11UA(2) of Income Tax Rules, 1962; or or as may be substantiated by the company to the satisfaction of the Assessing Officer, whichever is higher.
Comments
proxcel
Individual
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