TaxTMI 
TaxTMI 
Special provision for full value of consideration for transfer of share other than quoted share - (New) Section 79 / (Old) Section 50CA
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....consideration received or accruing as a result of such transfer for the purposes of section 72. Key Elements (a) Applicability only to Capital Assets • The provision applies only when the transferred share constitutes a capital asset. Therefore, shares held as stock-in-trade would generally fall outside the scope of this section. (b) Applicable only to Unquoted Shares • The section covers shares of a company that are not quoted shares. (c) Trigger Condition • The provision is triggered when: Actual Sale Consideration < Prescribed FMV • Once this condition is satisfied, the law disregards the actual consideration and substitutes the FMV. (d) Deeming Fiction ....
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.... of Fair Market Value of Unquoted Share [ Rule 57 Table Sl. No. 4 ] Fair market value of unquoted equity shares (A + B + C + D - L) x (PV)/(PE) Where,- A = book value of all the assets as appearing in the books of the company (other than jewellery, artistic work, shares, securities and immovable property) in the balance sheet as reduced by- (a) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any; and (b) any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset; B = the price which the jewellery and artistic work would fetch, if sold in the open market on the basis of the valuatio....
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.... amount of paid-up equity share capital as shown in the balance sheet. Unquoted shares and securities (other than equity shares in a company) which are not listed in any recognised stock exchange [ Rule 57 Table Sl. No. 5 ] The price it would fetch, if sold in the open market on the valuation date and the assessee may obtain a report from a merchant banker or an accountant in respect of such valuation. Under Section 50CA of the Income Tax Act, 1961 [ Upto 31.03.2026 ] • Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being share of a company other than a quoted share, is less than the fair market value of such share determined in such manner as may b....
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....uoted share, referred to in section 50CA, is transferred. • The fair market value of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner, namely:- • the fair market value of unquoted equity shares (A + B + C + D - L) x (PV) / (PE), where, A = book value of all the assets (other than jewellery, artistic work, shares, securities and immovable property) in the balance-sheet as reduced by,- (i) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any; and (ii) any amount shown as asset including the unamortised amount of deferred expenditure which does not represen....