Transfer of shares of a pvt ltd co.

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Anu (Querist)
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03 July 2014 A private limited company has 2 shareholders. During the current year,3 new shareholders are issued shares for want of funds. In addition to cash, one of them (not a relative to any shareholder) gets a % of shares from both the existing holders without paying any consideration.

In such a case, Capital gain on the hands of existing shareholders will not apply due to no consideration being received? Will the recipient be taxed for the full amount of share value ?

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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04 July 2014 if the fair market value of share transfered exceeds rs fifty thousands, the whole of the aggregated fair market val;ue will be income in the hands of tranferee( receipent of shares. pls refer to section 56(2) vii c.FMV WILL BE DECIDED AS PER RULE 11U AND 11UA