Determination of fair market value of unquoted equity shares of 'Start Up' companies under section 56(2)(viib) of the Income-tax Act read with Rule 11UA(2) of Income-tax Rules

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....CBDT) North Block, New Delhi, dated the 6th of February, 2018 To All Principal Chief-Commissioners of Income-tax Madam/Sir Subject : Determination of fair market value of unquoted equity shares of 'Start Up' companies under section 56(2)(viib) of the Income-tax Act read with Rule 11UA(2) of Income-tax Rules -reg .- Section 56(2)(viib) of the Income-tax Act, 1961 ....

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....es by the Assessing Officers which has otherwise raised a genuine investment on the basis of their 'idea'. It has been submitted that in tax-assessments, 'Start Up' companies invariably submit a valuation report from a merchant banker or an accountant based on Discounted Free Cash Flow Method as prescribed in Rule 11UA(2)(b) of Income-tax Rules, 1962. However, in assessments, such ....