Tax laws

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Yogita Kavishwar

Yogita Kavishwar (Querist)

17 April 2014 The shares which are issued at premium is treated as income in the hands of company but why it is so?

Rupesh Jain

Rupesh Jain (Expert)

17 April 2014 premium is not the income in hand of company

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Yogita Kavishwar

Yogita Kavishwar (Querist)

17 April 2014 Thanks for your reply sir, but I have read one case in which the Company received a notice from Income Tax Authority containing tax liability of company on the premium which is income of the company in the eyes of income tax.

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 April 2014 can you please give case citation here?

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Yogita Kavishwar

Yogita Kavishwar (Querist)

17 April 2014 Sir I don't know details but I got the reference of Circular issued in this regard issued by CBDT in 2010. So that I was confused is it Possible?

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 April 2014 you dont have to confuse at all. the position is simple. as such securities premium do not form part of income.

However, if the company is covered under section 56(2)(viib), any consideration received in excess of the fair market value shall be considered as income wef 1 April 2013

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