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Fair market value of unlisted preference shares

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mathan kumar

accountant

54 Points Posted on 05 March 2024

Hello sir,

As per income tax act, capital gain on unlisted shares is determined by sale consideration minus cost of acquisition. In case of computation of sale consideration for unlisted equity shares,we have to take higher of sale price and fair market value. Rule 11(UA)(1)((c)(b) is applicable for calculating fair market value for unlisted equity shares. In the same way, which section is applicable for computation of fair market value in case of unlisted preference shares?

Replies (4)

Quick Summary

This discussion seeks to clarify the method for calculating the fair market value (FMV) of unlisted preference shares for capital gains tax purposes. The original poster notes that for unlisted equity shares, the higher of sale price or FMV is used, with Rule 11(UA)(1)(c)(b) often applied for FMV. The core question is which section or rule applies to preference shares, and whether the same valuation methods used for equity shares are applicable.

sabyasachi mukherjee

Profession

19978 Points Posted on 05 March 2024

This forum cNt be for knowledge sake

CA Rashmi Gandhi

Chartered Accountant

44487 Points Posted on 06 March 2024

When you don't have knowledge then why you are here @ sabyasachi mukherjee

mathan kumar

accountant

54 Points Posted on 06 March 2024

Fair market value will be the valuation report prepared by a merchant banker or the same rule (Rule 11(UA)(1)((c)(b) applicable for both preference shares and equity shares?