No.402/90/2006-MC (16 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi the 16
PRESS RELEASE
The Central Board of Direct Taxes (CBDT) have notified the rules relating to
determination of fair market value of property, other than immovable property – viz.
jewellery; archeological collections, drawings, paintings, sculptures or any work of art; and
shares and securities – for the purposes of section 56 of the Income Tax Act 1961.
The fair market value of jewellery shall be its invoice value if transferred consequent
to purchase, or the value it would fetch if sold in the open market, or the value determined by
a registered valuer in case its value exceeds rupees fifty thousand.
The fair market value of archeological collections, drawings, paintings, sculptures or
any work of art also, the fair market value shall be its invoice value if transferred consequent
to purchase, or the value it would fetch if sold in the open market, or the value determined by
a registered valuer in case its value exceeds rupees fifty thousand.
The fair market value of shares / securities shall be as follows -
(i) Quoted shares / securities: transaction value if transferred through a recognized stock
exchange; or if the transfer is other than through a recognized stock exchange lowest
quoted value on the date of transfer, or the lowest quoted value on the date traded
immediately preceding the date of transfer if not traded on that date.
(ii) Unquoted equity shares: value arrived at by dividing the amount of book assets reduced
by book liabilities with the paid up equity capital and multiplying the resultant with paid
up value of equity shares.
(iii)Unquoted shares and securities other than equity shares: price it would fetch if sold in the
open market on the valuation date and the assessee may obtain a report from a merchant
banker or an accountant in respect of such valuation.
The law relating to taxation of gifts u/s 56 was amended with effect from 1
2009 to include property other than cash. These rules lay down the procedure for valuation
assets received as gifts. [Ref. CBDT Press Release 21 of 2009 dated 30
XXX
th April 2010st Octoberth September 2009.]
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