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CBDT has notified new rules for valuing the specified securities for the purpose of fringe benefit tax. The rule 40D given below is self explanatory
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,
PART -II- Section 3- Sub-section (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department Of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi, the 18th January, 2008
INCOME-TAX
S.O. 113(E). – In exercise of the powers conferred by section 295 read with Explanation (i) to clause (ba) of sub-section (1) of section 115WC of the Income-tax Act, 1961 (43 of 1961), read with section 22 of the General Clauses Act, 1897 (10 of 1897), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Second Amendment) Rules, 2008.
(2) They shall come into force with effect from the 1st day of April, 2008.
2. In the Income-tax Rules, 1962, in Part VII C, -
(i) in rule 40C, in sub-rule (4), clause (f) shall be omitted; and
(ii) after rule 40C, the following rule shall be inserted, namely:-
“Valuation of specified security not being an equity share in the company.
40D. For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security, not being an equity share in a company, on the date on which the option vests with the employee, shall be such value as determined by a merchant banker on the specified date.
Explanation.- For the purposes of this rule, “merchant banker” and “specified date” shall have the meanings assigned to them in clause (b) and clause (e) respectively of sub-rule 4 of Rule 40C.”
[Notification No. 11/2008/F.No.142/25/2007-TPL]
SOBHAN KAR, Under Secretary.
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