Fair market value rules for unquoted shares expanded to non-resident investments, with prescribed valuation methods and safe harbour. The amendment brings consideration from non-residents within clause (viib) of section 56(2) and revises rule 11UA to allow assessees to elect valuation methods by source of consideration: residents-clauses (a), (b), (c) or (e); non-residents-clauses (a), (b), (c), (d) or (e). Clause (a) prescribes a balance-sheet based formula; clause (b) allows merchant banker Discounted Free Cash Flow valuations; clause (d) allows specified alternative merchant banker methods. Transitional and procedural provisions include a deemed valuation date for merchant banker reports within ninety days and a safe harbour deeming issue price as fair market value where it exceeds specified valuations by a limited margin.
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Fair market value rules for unquoted shares expanded to non-resident investments, with prescribed valuation methods and safe harbour.
The amendment brings consideration from non-residents within clause (viib) of section 56(2) and revises rule 11UA to allow assessees to elect valuation methods by source of consideration: residents-clauses (a), (b), (c) or (e); non-residents-clauses (a), (b), (c), (d) or (e). Clause (a) prescribes a balance-sheet based formula; clause (b) allows merchant banker Discounted Free Cash Flow valuations; clause (d) allows specified alternative merchant banker methods. Transitional and procedural provisions include a deemed valuation date for merchant banker reports within ninety days and a safe harbour deeming issue price as fair market value where it exceeds specified valuations by a limited margin.
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