Notification

  • Not Able to Find What You’re Looking For? Speak to us directly! Our experts are here to guide you through any queries or challenges.

    Speak to Us

Insights on Equity Share Transfers

Get in touch with us

    Your information is confidential and secure

    Do you hold equity shares in a private limited company that has invested in immovable property or shares of another company? It’s essential to understand how Fair Market Value (FMV) is calculated for equity share transfers of such private limited company.

    Under the Income Tax Act, equity share transfers must be executed at FMV, as determined by Rule 11UA. According to Rule 11UA of the Income Tax Rules, the FMV is calculated based on the Net Asset Value (NAV).

    The NAV is calculated by subtracting total liabilities from total assets. However, special consideration is required for:
    1. Investments in Shares and Securities: These must be valued at their fair market value, not book value.
    2. Investments in Immovable Property: The value should be the stamp duty value adopted or assessed by any governmental authority. This necessitates obtaining a valuation report from a registered valuer (L&B).

    For companies and stakeholders, understanding these nuances is crucial.

    About the Author
    Priya Kapasi Shah
    Priya Kapasi Shah
    Associate Partner | Tax & Regulatory | priya.k@treelife.in

    Heads Treelife’s Financial Advisory practice, specializing in investment structuring, cross-border transactions, and tax and regulatory advisory. Also leads on AIF setups and advisory services for GIFT IFSC.

    Rohit Gandhi
    Rohit Gandhi
    Senior Associate | Tax & Regulatory | rohit.g@treelife.in

    Specializes in financial due diligence, valuations, business structuring, and income tax advisory. Contributes to the Financial Advisory team by helping startups and businesses make informed strategic decisions.

    Jitesh Agarwal
    Jitesh Agarwal
    Founder | jitesh@treelife.in

    Leads the VCFO, finance tax, and regulatory functions at Treelife. Responsible for the firm’s non-operational growth and providing strategic advisory in GIFT City, helping clients navigate complex regulatory landscapes effectively.

    We Are Problem Solvers. And Take Accountability.

    Related Posts

    Compliance Calendar – July 2025 (Checklist & Deadlines)
    Compliance Calendar – July 2025 (Checklist & Deadlines)

    Sync with Google CalendarSync with Apple Calendar As we enter the second half of 2025, staying compliant with various financial,...

    Learn MoreLearn More
    Conversion of Partnership Firm to LLP – Step by Step Process
    Conversion of Partnership Firm to LLP – Step by Step Process

    For many entrepreneurs in India, a partnership firm serves as the foundational legal structure for their business ventures. However, as...

    Learn MoreLearn More
    Memorandum of Association – MoA Clauses, Format & Types
    Memorandum of Association – MoA Clauses, Format & Types

    The Memorandum of Association (MOA) is one of the most essential documents in the company incorporation process, forming the foundation...

    Learn MoreLearn More

    For Customer Support

    Mumbai | Delhi |
    Bangalore | GIFT City

    Speak to Us!

    We respond within 60 minutes.

      Your information is confidential and secure

      For Customer Support

      Mumbai | Delhi |
      Bangalore | GIFT City

      Fill out the form to unlock the full report!

      Image