Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: TDS :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: VAT RATES :: cpt :: list of goods taxed at 4% :: VAT Audit
 
 
« News Headlines »
 Integrated Goods and Services Tax (IGST) Rules, 2017 (As on 15.11.2017)
 Central Goods and Services Tax (CGST) Rules,2017 (As on 15.11.2017)
  101st Constitution Amendment Act, 2016
 Pr. Commissioner Of Income Tax-6 Vs. Mccain Foods India Pvt. Ltd.
 Section 10 of the Income-tax Act, 1961
 Income tax returns filing: No tax on gift received from relatives in form of cash
 Income tax returns (ITR): Here is why you need to pay higher tax on other incomes
 GST Update On Issuance Of Debit Notes And Credit Notes
 How Mutual Fund Investments Can Help Save Income Tax
 Income tax returns (ITR) filing: Why small service providers need to get this benefit
 How NRIs can avoid tax troubles

Fair market value for FBT on Esops may be a days work
September, 10th 2007
Taxmen are narrowing down their choices from their stock of options on finding the right price for taxing Esops. The employee stock option plan (Esop) valuation norms for listed companies are likely to rely on the opening and closing price of the scrip on the day Esop vests with the employee.

If the stock has not witnessed any trading that day, the last traded prices could be used as the fair market value (FMV). The fringe benefit tax (FBT) would be levied on the difference between the price at which the employee gets the option and FMV.The date of vesting of Esop will be the point of valuation and its exercise date will be the point of taxability.

In case of unlisted companies, the income-tax (I-T) department is considering a formula which will take the book value of the company as the base, and then use a multiplier that listed companies in the sector enjoy.

The book value is calculated by subtracting the companys liabilities (other than share capital) from its assets, and dividing the result by number of shares.To arrive at FMV, the book value is increased by a multiplier, benchmarked to the average earnings per share and share price of listed entities in that industry.

Valuation has never been an exact science. So it would be a challenge to come up with a very simplistic and easily understandable valuation model for unlisted companies, Ernst & Young partner Amitabh Singh said.

The income-tax departments work has been made harder by the fact that prescribing a multiplier for every industry may be difficult. In fact, the guidelines are being delayed because of this.Besides, arriving at a multiplier for a company which is present in two different sectors, say steel and IT, may become complicated.

The department could prescribe general separate multipliers for manufacturing and services companies to keep the calculations simple.

According to KPMG director Vikas Vasal, the fair market value of stock options should ideally be computed as on the date of vesting, as these are the options in the hand of employees and not shares.

However, the valuation of options is quite complex. Therefore, to keep the valuation simple, the government intends to levy FBT on shares. Keeping in view the erstwhile CCI guidelines and valuation rules under wealth tax, net asset value method or some other method or a combination of two or more methods may be prescribed, in case of unlisted companies, Mr Vasal said.

The fair market value arrived at for computing the value of fringe benefits will also be used for calulating the capital gain arises from the transfer of specified security or sweat equity shares.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System development CMS development Content Management Solutions CMS Solutions Content Management Services CMS Services CMS Software

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions