CBDT Notifies Rules to Determine Amount of Buy-Back of Shares
CBDT has amended the Income Tax Rules to insert Part VII-BA to determine amount received by a company in respect of the share issued by it, being the subject matter of buy-back. The Rule provides for determination of the amount in 12 situations:
1. Where the share has been issued by a company to any person by way of subscription;
2. Where the company had at any time, prior to the buy-back of the share, returned any sum out of the amount received;
3. Where the share has been issued by a company under any plan or scheme under which an employees' stock option has been granted or as part of sweat equity shares;
4. Where the share has been issued by a company being an amalgamated company, under a scheme of amalgamation;
5. The amount received by a company, being a resulting company in respect of shares issued by it under a scheme of demerger;
6. The amount received by the demerged company in respect of the original shares in the demerged company;
7. Where the share has been issued or allotted by the company as part of consideration for acquisition of any asset or settlement of any liability;
8. Where the shares have been issued or allotted by a company on succession or conversion, as the case may be, of a firm into the company or succession of sole proprietary concern by the company;
9. Where the share has been issued or allotted, without any consideration, on the basis of existing shareholding in the company;
10. Where the shares have been issued on conversion of preference shares or bond or debenture, debenture-stock or deposit certificate in any form or warrants or any other security issued by the company;
11. Where the share being bought back is held in dematerialised form and the same cannot be distinctly identified;
12. In any other case.
CBDT Notification No. 94/2016., Dated: October 17 2016