The Central Board of Direct Taxes (CBDT) on May 26, 2023, issued the Draft Income tax ….(Amendment), Rules, 2023 to further amend the Income-tax Rules, 1962.
The following has been amended namely: -
• Rule 11UA which states “method for computation of the fair market value of unquoted equity shares for the purposes of the Clause (viib) of sub-section (2) of section 56 of the Act”
1. For sub-rule (2), the following sub-rule shall be substituted, namely:
“(2) Notwithstanding anything contained in sub-clause (b) of clause (c) of sub-rule (1), the fair market value of unquoted equity shares for the purposes of sub-clause (i) of clause (a) of the Explanation to clause (viib) of sub-section (2) of section 56 shall be the value, on the valuation date, of such unquoted equity shares as determined”
The computation of the fair market value of unquoted equity shares has been stated - (A- L) x [PV/PE]
2. The following sub-rule has been inserted namely: -
“(3) Where the date of valuation report by the merchant banker for the purposes of sub-rule (2) is not more than ninety days prior to the date of issue of shares which are the subject matter of valuation, such date may, at the option of the assessee, be deemed to be the valuation date
(4) Where the issue price of the shares exceeds the value of shares as determined in accordance with –
(i) clause (a) or (b) of sub-rule (2), for consideration received from a resident, by an amount not exceeding ten percent of the valuation price, the issue price shall be deemed to be the fair market value of such shares.
(ii) clause (a) or (b) or (d) of sub-rule (2), for consideration received from a non-resident, by an amount not exceeding ten percent of the valuation price, the issue price shall be deemed to be the fair market value of such shares."
They shall come into force from the date of publication of the notification in the Official Gazette.
All the stakeholders as well as the general public may provide suggestions/comments on the same and send them at [email protected] latest by June 05, 2023.
[Notification No. F. No. 370142/9/2023-TPL(Part-I)]
