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Deemed Income

Tax queries 1453 views 6 replies

Dear All,

I have a query pls guide

A pvt. ltd. company issued shares of Rs. 10/- each at par to one of its director (there are 5 other shareholders ) Book value is Rs. 50/-.Will it treated as benefit to director and chargeble to tax ?

if yes under what section ?

Regards,

Replies (6)

Dear Pravin,

If Shares are issued under ESOP, then Yes it may be taxable as perquisite as a part of Salary.........

But not in other cases, the purchase of shares cannot be said to have generated any Income to the Director..............

If no consideration then it will be treated as perquisite.

If the consideration is inappropriate, then also it will be considered as perquisite, I think.

For ex. shares having M.V. Rs. 200.00, B.V. Rs. 100.00 given @ Rs. 50.00.

Others plz comments.

@ Pravin if it is given as ESOP, then obviously it will be charged as perquisite. Plz clarify this assumption.

Please carify the full question.

Shares were issued to director- for cash or under ESOP

Dear Pravin.........

Agree with all.....

Shares issued under ESOP - then it  may be taxable as perquisite - part of Salary............

In case of others i don't think it will be taxable...

@ Balaji-You mean if they are given on undervalue, then it wouldn't be perquisite ? 

I dont agree.


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