Section 56(2)(viia /viib)

This query is : Resolved

Goutam Jain (Querist)
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11 June 2013 A Private limited company is alloting shares to its directors.The FMV Calculated as per section 56(2)(viib) is Rs25 and company is issuing share at Rs. 20/-

1. Whether the difference amount between FMV and Issue price will be taxable in hands of directors u/s 52(2)(viia)?

2. Also whether there will be any liability in hands of company?

Pls reply asap

Thanks in advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 June 2013 Section 52(2)(viia) is applicable to firms and private companies.
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You may search possibility of taxability of this transaction to the Director U/s 56(2)(vii)(c)(ii) where such difference exceeds Rs 50000/- (in present case if more than 10000 shares are allotted to the director at concessional rate).
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