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Issue of shares for consideration other than cash

This query is : Resolved 
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(Querist)
03 November 2020 Dear Member,

A company wants to issue shares to its Directors in lieu of services offered by them as they are not drawing any salary.
Now what is the income tax implication??
Will the value of shares be added in their income and taxed in their Yearly income OR there will only be Longterm Gain or Both??
Kindly enlighten
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
03 November 2020 The value of shares be added in their income as perquisite considering it as sweat equity.
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Swati Sharma

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Swati Sharma (Querist)
03 November 2020 Thanks... also if shares are issued to promoters for providing know-how, then also it will be added to their income??
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
03 November 2020 Yes, it's for service ..............
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