Prevention of money laundering act 2002

Nice Sharing Renu....... but you didn't Scrap me.... But Its Okay...

Recently in Finane Bill 2012 An amendment in Section 56 of Income Tax Act, 1961 has been Added on Money Laundering....

The Details are following........

The Bill amends section 56(2) of the Act with effect from April 1, 2013, by inserting a new sub clause (viib). The new sub clause provides that if a company, in which the public is not substantially interested, issues shares to any person resident in India for a consideration exceeding the fair market value of such shares, then the aggregate consideration so exceeding the fair market value will stand taxed as ‘income from other sources’.

The sub clause defines ‘fair market value’ to mean the higher of the value as determined in accordance with a prescribed method or the value substantiated by the company to the satisfaction of the assessing officer based on the value of the intangible or tangible assets or other business or commercial rights.

Thus, closely held companies issuing shares at a premium to residents may end up paying 30% tax on such amount of premium that falls beyond the aforementioned ‘fair market value’ threshold.