Company selling its own shares in exchange of immovable property

[Bayyareddy DK]

Dear Sir, One of my client is selling it's own shares in exchange of immovable property? No monetary consideration is involved. Is it advisable as per law?.

AI Summary

Client Plans Share-For-Property Exchange; Must Comply with Companies Act 2013 and Income Tax Act 1961, Sec 50C. A client is considering selling its own shares in exchange for immovable property without monetary consideration. Experts advise that the value of the shares must be determined via a valuation report, and compliance with both the Companies Act, 2013, and the Income Tax Act, 1961, is essential. The transaction must align with Section 50C of the Income Tax Act if the share value is less than the stamp duty value of the property. Necessary approvals from the board and shareholders are required, and failure to comply with these legal requirements could result in penalties.