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Taxability of issue of shares at premium by private ltd co

Others 337 views 2 replies
Is there any taxability if a private company issues shares at premium??
Replies (2)
to charge shares at premium a valuation report is required for justification.

Premium to be charged to securities premium account and can be used for buyback, issue of bonus shares etc.

I don't think taxability will come into picture
Yes, if Pvt Ltd co issue shares at premium and that amount is so exceeded above its FMV of shares then excess amount received by Pvt Ltd co. over it's market value shall be taxable under section 56(2)(viib).

For ex: If FMV of shares of XYZ Pvt Ltd. are Rs. 25 (Face value Rs. 10) but the Company issue shares at Rs. 95 per share then excess amount i.e. 95-25 = 70 shall be taxable in hands of XYZ Pvt Ltd. u/s 56(2)(viib).


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