Agni Ltd issued equity shares of rs 10 each at rs 40/share.
The FMV of share on date of issue was ascertained as Rs 25/share. The compamy issued 100000 equity shares
tax liability for co. ?
There's this section 56(2)(viib) in the Income Tax Act, 1961 where-in when a Pvt. Ltd. Company issues equity shares at premium (which also exceeds FMV) to a Resident, then (issue price - FMV) shall be subject to Tax under the head 'Income From Other Sources'.
Hence it is quite clear that the above provision applies ONLY WHEN shares are issued by a Pvt. Ltd. Company at a premium. In your question, its Agni Ltd which is a public company (hence not a Pvt. Co.). As a result, there will not be any tax liability, since section 56(2)(viib) does not apply.
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