TaxTMI 
TaxTMI 
An existing private ltd company issuing further shares to only few existing shareholder at face value.??
Weather this attracts Sec 56(vii) ?
Applicability of Sec 56 (vii)
25 Feb 2013 
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Taxation of shares issued below fair market value may be taxed as income unless valuation is proven.
Applicability of Sec 56(vii): the provision taxes the excess of the fair market value of property received over the consideration paid; face value of shares is not determinative. Determination of taxability is fact specific and depends on valuation evidence, with transactions among a limited set of existing shareholders liable to closer scrutiny. (AI Summary)
Applicability of Sec 56(vii): the provision taxes the excess of the fair market value of property received over the consideration paid; face value of shares is not determinative. Determination of taxability is fact specific and depends on valuation evidence, with transactions among a limited set of existing shareholders liable to closer scrutiny. (AI Summary)