Tax on shares allotted after increase in paid up capital
This query is : Resolved
17 November 2013
Dear Experts,
I would like to know if a private limited company is seeking to increase the paid up capital and the current book value of the shares is higher than the face value, then is there a tax liability of any type to be paid by the member (or the company) who receives shares in lieu of capital invested. In this case,the company is considering to increase the paid up capital on the face value of the share. Is it even possible to do the same under the situation when book value is higher.
Thank you.
I would like to know if a private limited company is seeking to increase the paid up capital and the current book value of the shares is higher than the face value, then is there a tax liability of any type to be paid by the member (or the company) who receives shares in lieu of capital invested. In this case,the company is considering to increase the paid up capital on the face value of the share. Is it even possible to do the same under the situation when book value is higher.
Thank you.
17 November 2013
may get covered under 56(2)(vii)(c).
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