40C Omitted & 40D Inserted in the Income Tax Rule
NOTIFICATION NO. 11/2008, DATED 18-1-2008
In exercise of the powers conferred by section 295 read with Explanation (i) to clause (ba) of sub-section (1) of section 115WC of the Income-tax Act, 1961 (43 of 1961), read with section 22 of the General Clauses Act, 1897 (10 of 1897), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely :
1. (1) These rules may be called the Income-tax (Second Amendment) Rules, 2008.
(2) They Shall come into force with effect from the 1st day of April, 2008.
2. In the Income-tax Rules, 1962, in Part VIIC,
(i) in rule 40C, in sub-rule (4), clause (f) shall be omitted; and
(ii) after rule 40C, the following rule shall be inserted, namely :
40D. Valuation of specified security not being an equity share in the company. For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security, not being an equity share in a company, on the date on which the option vests with the employee, shall be such value as determined by a merchant banker on the specified date.
Explanation. For the purposes of this rule, merchant banker and specified date shall have the meanings assigned to them in clause (b) and clause (e) respectively of sub-rule (4) of rule 40C.