Overview
The Income Tax Act requires a fair-value determination for many share transactions — most notably when an unlisted company issues shares at a premium (Section 56(2)(viib), the “angel tax” provision), where the premium above fair value can be taxed. Fair value is computed under Rule 11UA using methods such as NAV or DCF.
A proper Rule 11UA valuation report supports your share issue, protects against angel-tax exposure and provides documentation for assessments.
CorpRaasta arranges the Rule 11UA valuation through the appropriate registered professional (Merchant Banker for DCF where required) and ensures your share-issue pricing and documentation are defensible.
What is Income Tax Valuation (Rule 11UA)?
Income tax valuation under Rule 11UA determines the fair market value of unlisted shares for income-tax purposes, including for share issues under the angel-tax provision (Section 56(2)(viib)).
Why it matters
Issuing shares above fair value without proper valuation can attract angel tax on the excess premium. A Rule 11UA report justifies your pricing and reduces the risk of a tax demand.
Key features
Who needs it
Documents required
How it works
Assess method
We determine the applicable Rule 11UA method (NAV/DCF).
Financial analysis
Financials and projections are analysed.
Valuation report
A Rule 11UA valuation report is issued by the registered professional.
Documentation
We align the report with your share-issue pricing and records.