Mohammed (CS, Mcom, LLB) (857 Points)
06 December 2013Dear Members,
Good Evening,
A Private Limited company is going to issue Non Convertible Preference Shares, and as per Sec 56 of Income Tax the shares are to be issued at Fair Market Value (FMV).
The Question is even if its a Non Convertible Preference Shares still it needs to be issued at FMV or it can be issued at Par??
Please advice at the earliest
GAUTAM SHARMA
(Audit Assistant)
(353 Points)
Replied 06 December 2013
If we apply literal interpretation rule, then it will ne taxable if isssued at more than FMV.
CAclubindia
