CAs no more eligible for being valuer of unquoted equity shares

Income-tax (6th Amendment), Rules, 2018 are introduced solely for the purpose of making CAs ineligible to determine the fair value of unquoted equity shares.

As per Rule 11UA of Income Tax rules, 1962, only qualified Chartered Accountants and Merchant bankers were allowed to determine fair value of unquoted equity shares.

This determination of fair value is used for the purpose of calculating fair value of property given without consideration so as to make it taxable under different circumstances under the head Income from Other Sources under section 56(2) of the Income Tax Act, 1961.

Since, the publication of this rule on 24th May, 2018, only qualified merchant bankers are now allowed to make this valuation.