Fmv of shares
This query is : Open
24 March 2012
As per Budget 2012,
New section 56(2) has been inserted in case of a company not being a company in which public are substantially interested wherein the Share premium received by the company on issue of shares in excess of the Fair Market Value to be treated as income under the head ‘Income From Other Sources’
(w.e.f 1/04/2013).
Please guide me how to calculate the FMV of the shares? ?
New section 56(2) has been inserted in case of a company not being a company in which public are substantially interested wherein the Share premium received by the company on issue of shares in excess of the Fair Market Value to be treated as income under the head ‘Income From Other Sources’
(w.e.f 1/04/2013).
Please guide me how to calculate the FMV of the shares? ?
24 March 2012
THE GOVT WILL COME OUT WITH RULES IN THIS REGARD PL WAIT
24 March 2012
THERE ARE SOME RULES LAID DOWN IN Notification no. 23/2010 dated 7 April 2010
24 March 2012
@CA MANOJ GUPTA SIR: WHAT ABOUT ABOVE RULES SIR??
24 March 2012
those rules are for the purposes of section 56(2)(v ii)
new claue viib reads as under
‘(viib) where a company, not being a company in which the public are substantially interested,
receives, in any previous year, from any person being a resident, any consideration for issue of
shares that exceeds the face value of such shares, the aggregate consideration received for
such shares as exceeds the fair market value of the shares:
Provided that this clause shall not apply where the consideration for issue of shares is received
by a venture capital undertaking from a venture capital company or a venture capital fund.
Explanation.—For the purposes of this clause,—
(a) the fair market value of the shares shall be the value—
(i) as may be determined in accordance with such method as may be prescribed; or
(ii) as may be substantiated by the company to the satisfaction of the Assessing Officer,
based on the value, on the date of issue of shares, of its assets, including intangible assets
being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other
business or commercial rights of similar nature,
whichever is higher;
It is provided that (a) the fair market value of the shares shall be the value—
(i) as may be determined in accordance with such method as may be prescribed
so wait for rules
CA MANOJ GUPTA
JODHPUR
09828510543
new claue viib reads as under
‘(viib) where a company, not being a company in which the public are substantially interested,
receives, in any previous year, from any person being a resident, any consideration for issue of
shares that exceeds the face value of such shares, the aggregate consideration received for
such shares as exceeds the fair market value of the shares:
Provided that this clause shall not apply where the consideration for issue of shares is received
by a venture capital undertaking from a venture capital company or a venture capital fund.
Explanation.—For the purposes of this clause,—
(a) the fair market value of the shares shall be the value—
(i) as may be determined in accordance with such method as may be prescribed; or
(ii) as may be substantiated by the company to the satisfaction of the Assessing Officer,
based on the value, on the date of issue of shares, of its assets, including intangible assets
being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other
business or commercial rights of similar nature,
whichever is higher;
It is provided that (a) the fair market value of the shares shall be the value—
(i) as may be determined in accordance with such method as may be prescribed
so wait for rules
CA MANOJ GUPTA
JODHPUR
09828510543
24 March 2012
thank you very much sir
28 March 2012
Manoj Sir, that was really well explained. I have a query regarding this. With this provision, can a newly formed company issue its shares at premium and how? I request you to explain the thing.
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