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  • Share Premium Received On Issue Of Shares Is Not Taxable Under The Income-tax Act Flash News

Get Share Premium Received On Issue Of Shares Is Not Taxable Under The Income-tax Act Flash News

KPMG FLASH NEWS KPMG IN INDIA Share premium received on issue of shares is not taxable under the Incometax Act 6 September 2013 14 August 2013 Background Recently, the Mumbai Bench of the Incometax.

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Section 56(2)(viib) of the Income Tax Act provides that where a closely-held company[1] issues shares to a resident investor at a value higher than the “fair market value” of such shares, then the excess of the issue price over the fair value will be taxed as the income of the issuer company.

When you receive a dividend, the total value (basis) of the stock doesn't change. Instead, the basis of each share changes. Stock dividends usually don't have tax implications until you sell the shares. So, the amount paid in cash for the fractional share is considered taxable income.

Any income which is not chargeable to tax under any other heads of income and which is not to be excluded from the total income shall be chargeable to tax as residuary income under the head “Income from Other Sources”. Basis of Charge [Sec. 56]:

Section 56(2)(viia) of the Income-tax Act, 1961 ('Act') provides for taxation of income where a company in which public are not substantially interested ('specified company')or a firm receives shares of a specified company from a person for no or inadequate consideration.

(2) If the property is received for a inadequate consideration and difference between the stamp duty value and consideration is more than the higher of – ₹50,000 and 10% of the consideration, then, the stamp duty value in excess of the consideration would be taxable as income in the hands of the beneficiary.

(iv) brother or sister of either of the parents of the individual; (v) any lineal ascendant or descendant of the individual; (vi) any lineal ascendant or descendant of the spouse of the individual; (vii) spouse of the person referred to in clauses (ii) to (vi).

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© Copyright 1997-2025
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232