XYZ PVT. LTD. Its shares are held by ABC Ltd. (50% holding) and DEF Ltd. (50%).
Does ABC LTD. DEF LTD. needs to transfer its share at Fair Market Value?
PLz help with the Provisions if any.
Menu
Section 56
Replies (3)
Section 56(2)(viib) of IT Act provides that if a company issues shares at premium at a price higher than fair market value, same will be chargeable to tax as other income. It applies to issue of shares by a company and not to transfer of shares.
what if the shares are issued at discount?
for example Rs. 100,000,000 (ten crores) being issued at RS. 1,000,000(ten lakh).
You can issue a discount also. But in that case cost of acquisition for the buyer will be less and there will be more capital gain when shares are sold.
Recent Threads
- Poll: Do you spend >30 min/day fixing Tally JSO
- Interest on Accident Claim by Minor
- Capital Gain and Basic Exemption Limit
- Loan to wife and interest income husband income or
- AOC-4 is not being filed
- Returning the shares gifted by daughter?
- Gst tax rate
- Accounting of Govt Grant in aid-Assam Tea Estate
- Utilizing Capital gains in new home construction
- Hi i have some doubt about my microsoft exam?
Related Threads
CAclubindia
