Rule 11ua

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Meet Shah

Meet Shah (Querist)
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08 February 2016 I want to know the difference between PE and PV as per Rule 11UA of the Income Tax Rules, 1962

Arpit Shah

Arpit Shah (Expert)
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08 February 2016 https://taxguru.in/income-tax/method-calculate-fmv-unquoted-shares.html

Meet Shah

Meet Shah (Querist)
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08 February 2016 The explanation is little ambiguous.... PE- total amount of paid up equity share capital as shown in the balance sheet PV- paid up value of such equity shares I am unable to get the difference between the two...

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 Sure! Here’s a simple explanation of PE and PV as per Rule 11UA of the Income Tax Rules, 1962, which deals with valuation of unquoted shares:

PE (Paid-up Equity Capital as per Balance Sheet)
PE means the total amount of paid-up equity share capital of the company as shown in the balance sheet.

It includes all equity shares issued and fully paid up by the company.

This is the aggregate face value of all equity shares that the company has issued to shareholders and recorded in its books.

PV (Paid-up Value of such Equity Shares)
PV means the paid-up value of the specific equity shares for which you want to calculate the fair market value.

For example, if you are valuing a particular block of shares or minority shareholding, PV is the face value of that particular block or number of shares.

Essentially, PV is the paid-up value of the shares being valued, not the total paid-up capital of the entire company.

Difference in brief:
Term Meaning Example
PE Total paid-up equity capital of the company (all shares combined) If company has 1,00,000 shares of Rs. 10 each fully paid, PE = Rs. 10,00,000
PV Paid-up value of specific shares for valuation If you are valuing 1,000 shares of Rs. 10 each, PV = Rs. 10,000

Why is this important?
In the formula for valuation of unquoted shares, PE and PV help to proportionally calculate the value of the shares you want to price based on the entire company’s paid-up capital.

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