Unquoted share valuation rules replace understated sale consideration with fair market value for capital gains computation.

Deeming provisions for transfer of unquoted shares substitute fair market value for actual consideration where a capital asset being a share of a company other than a quoted share is transferred for less than prescribed FMV. The substituted FMV is treated as the full value of consideration for computing capital gains, and the rule applies only to shares held as capital assets; quoted shares are those regularly quoted on a recognised stock exchange in ordinary course. Fair market value of unquoted equity shares is determined under the prescribed formula based on asset value, liabilities, paid-up share capital, and proportional equity value.

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