Subscription shares issued at premium
This query is : Resolved
09 September 2013
can subscription shares be subscribed at premium at the time of incorporation of the company..
09 September 2013
No I do not think it is possible.
Wait for the opinion of other experts....
Regards
Wait for the opinion of other experts....
Regards
09 September 2013
The premium provisions will always apply after the incorporation of the company. The premium is derived on the basis of valuation under different method. And at the time of incorporation it is not possible.
10 September 2013
I agree with expert Ankur.
As per Section 56(2)(viib) of the Income-tax Act, 1961; any company issuing shares to a resident at price higher than the fair value (as computed in accordance with Rule 11U and 11UA of the Income-tax Rules 1962) would be subject to tax in India on the amount of premium received in excess of the fair value of such shares. For example -
Face Value of Shares - 10
Fair Value of Shares - 15
Issue Price of Shares - 20
Considering the provisions in above example Rs.5 will be subject to tax under Section 56(2)(viib).
As per Section 56(2)(viib) of the Income-tax Act, 1961; any company issuing shares to a resident at price higher than the fair value (as computed in accordance with Rule 11U and 11UA of the Income-tax Rules 1962) would be subject to tax in India on the amount of premium received in excess of the fair value of such shares. For example -
Face Value of Shares - 10
Fair Value of Shares - 15
Issue Price of Shares - 20
Considering the provisions in above example Rs.5 will be subject to tax under Section 56(2)(viib).
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- GST ITC REVERSE
- Fixe term employment
- Is any professional CA is here please reply
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Putting a heading on received mail
- Consolidated financials
- Reprocessing of rectification order AY 2025-26
- Section 50-fixed asset-->building ceases to exist
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- TDS on TRUST
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
