Share premium taxation under section 56(2)(viib) depends on fair market value, valuation rules, and specified exemptions.

Section 56(2)(viib) applies where a closely held company receives consideration for issue of shares from a resident in excess of face value and such excess exceeds the fair market value of the shares. The excess is taxable as income from other sources. Fair market value is determined under rule 11UA or by valuation substantiated to the Assessing Officer, including value of assets and intangible assets. The provision is subject to specified exemptions and valuation rules.

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