The Central Board of Direct Taxes (CBDT) has amended the Income Tax Rules, 1962, by omitting the words “or an accountant” from rule 11UA(2)(b). Section 56(2)(viib) of the Income Tax Act, 1961 (ITA), provides that where consideration received by a company for issuance of shares exceeds the fair market value (FMV) of the shares, the difference between the consideration received and the FMV shall be subject to tax in accordance to the ITA under the heading of income from other sources. Rule 11UA(2)(b) prescribes the method of calculating the FMV for the purposes of section 56(2)(viib).
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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley, Munich and New York. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
