AMIT BAJAJ ADVOCATE

Consideration in excess of F.M.V of shares to be treated as income from other source if consideration received is in excess of Face Value of shares: It is proposed to insert a new clause (viib) in the  aforesaid sub-section so as to provide that where a company, not being a company in which the public are substantially interested, receives, in any previous year,  from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income-tax under the head “Income  from other sources”. However, the said new clause  shall not apply where the consideration for issue of shares is received by a venture capital undertaking from a venture capital company or a venture capital fund.