Genesis:
Finance Act, 2012 with effect from 01.04.2013 has introduced a new sub-section to Section 56 (2) of Income Tax Act, 1961 (for brevity ‘Act’). The new sub-section (viib) taxes any amount which is received by a company from any person who is resident, any consideration for issuance of shares that exceeds the face value of shares, the aggregate consideration received for such shares as exceeds the fair market value (for brevity ‘FMV’) of the shares. Section 56(2)(viib) will apply to such companies in which public are not substantially interested.
Read more: Angel Tax – Genesis, Problem, Relief, Conclusion & Way Forward
