Applicability of provisions of Section 56(2)(viib)
Notification No. 24/2018 dated 24th May 2018
Section 56(2)(viib) brings to tax the consideration for issue of shares if it exceeds the FMV of shares. This provision is not applicable if the shares are issued at face value, or are issued to non-residents, or are issued by a Venture Capital Undertaking from a Venture Capital Company or Fund. It is now notified that this provision will not apply to consideration received by eligible start-ups for issue of shares that exceed the face value of such shares, if the consideration has been received from an investor in accordance with the approval granted by the Inter-Ministerial Board of Certification.