Valuation Rules for determination of Fair Market Value under section 56

Fair market value rules under section 56 determine taxable income when property or shares are received below or without consideration.

Valuation rules under section 56 treat stamp duty value as the primary measure for immovable property received without or for inadequate consideration, with SDV on the agreement date allowed where registration differs. For movable property, invoice value from a registered dealer or open market price on the valuation date (with registered valuer report when thresholds exceeded) is FMV. For shares, quoted shares use market parameters while unquoted shares follow Rule 11UA formulae, including net asset-based inclusions and exclusions and options on valuation date using recent merchant banker reports.