transfer of shares at less than book value of a closely held by one shareholder to another shareholder or any other person
This query is : Resolved
08 May 2017
hlo all, can one shareholder of a closely held company transfer his shares to another shareholder or any other person at less than book value .is there any provision attracted..kindly suggest..
08 May 2017
No, A shareholder of closely held company cannot transfer its shares at less than book value because as per section 56(2)(viia) of income tax act if shareholder of any closely held company transfer its shares without consideration or for inadequate consideration in excess of Rs. 50000 then such excess is treated as income under other sources of donee
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