Tax on share premium

If I have 10000 shares of Rs.10 each i.e. Rs.1lac share capital and reserve & surplus of Rs.9Lac. Further my asset side comprises of Fixed assets of Rs.3Lac and Current Assets of Rs.7lac. Now, if keep on issuing shares at Rs.100 each i.e. at Rs.90 premium, will I need to pay any tax for this??

 

Thanks in Advance for everyone's suggestions.

Replies (2)

If yours is a closely held company then any consideration received in excess of fair value of shares on issuance of shares will be treated as income under the head "Income from Other Sources". The said amendment is introduced by Finance Bill 2012.

 

Thanx for your reply. Mine is a pvt ltd company.. How I will determine whether consideration received is in excess or deficit or at par to the fair market value? How is this fair value will be calculated in my case? 

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