CBDT released Draft Rules on Angel Tax for public comments till June 5, 2023:

CBDT released Draft Rules on Angel Tax for public comments till June 5, 2023 The Central Board of Direct Taxes(CBDT) invites public comments on the draft rule 11UA for implementing the amendment made by the Finance Act, 2023. Clause (viib) of sub-section (2) of section 56 of the Income-tax Act, 1961 (the Act), prior to amendment vide Finance Act 2023, inter alia, provided 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 fair market value of the shares, it shall be chargeable to income-tax under the head ‘Income from other sources’. Rule 11UA of the Income-tax Rules, 1962 (the Rules) provides the method for computation of the fair market value of unquoted equity shares for the purposes of the Clause (viib) of sub-section (2) of section 56 of the Act. In the Finance Act, 2023, an amendment was introduced in this provision to bring the consideration received from non-residents within the ambit of Clause (viib) of sub-section (2) of section 56 of the Income-tax Act, 1961. As a result of the above amendment, representations were received from various stakeholders raising their concerns that genuine non-resident investors may have to face undue hardship in matters related to valuation of shares etc. In view of this, rule 11UA of the Rules is proposed to be amended. The draft notification with proposed amendment to rule 11UA of the Rules is enclosed. It is requested that all the stakeholders as well as the general public may provide suggestions/comments on the same and send them at the email address [email protected] latest by June 05, 2023. For Official Notification Download PDF Given Below: