Respected All,
W.r.t. Sec. 56(2)(viia) of the IT Act, 1961, kindly advice on the following:
If a listed company purchases shares of a unlisted company at a consideration lower than the market value, will the difference amount will be chargeable to tax if the same exceeds Rs. 50000/-.
Please advice.
Regards,
Priti
Priti,
As per section 56(2)(viia), a company means a company in which public are not substantially interested. When a listed company is involved either at the transferor's end or at the transferee's end, the provisions of this section will not apply. This section will be attracted, in case of companies, only when transfer takes place between two unlisted companies.
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