Valuation of unquoted shares: CBDT notifies rules

The amended rules called the Income-tax (20th Amendment), Rules, 2017 for Sections 56(2)(x) and 50CA, are broadly in line with the draft rules released by the CBDT in May.

By: ENS Economic Bureau | New Delhi | Published: July 14, 2017 3:01 am

The CBDT has notified final rules prescribing ‘fair market value’ method for valuation of unquoted shares. The final rules state that the fair market value of unquoted equity shares will include the book value of all assets (other than jewellery, artistic works, shares, securities and immovable property) and the open market value of jewellery or artistic trust and shares/ securities, value adopted for payment of stamp duty for immovable properties, excluding any amount paid as income tax and the book value of liabilities.

The amended rules called the Income-tax (20th Amendment), Rules, 2017 for Sections 56(2)(x) and 50CA, are broadly in line with the draft rules released by the CBDT in May. The amended rules shall come into force from April 1, 2018 and shall apply in relation to assessment year 2018-19 and subsequent years.

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