I-T department invites comments on draft rules for valuing startup investment by non-residents

The income tax department on Friday invited comments from stakeholders on rules for valuing non-resident investment in unlisted startups. The Central Board of Direct Taxes (CBDT) has issued a draft notification inviting comments on the draft rule 11UA of Income-tax Rules, 1962, pertaining to the method of computation of fair market value (FMV) of unquoted equity shares for the purposes of section 56(2)(viib) of Income-tax Act, 1961.

The rules would be effective from April 1, 2023.

The CBDT was expected to come out with valuation guidelines for valuing non-resident investment in unrecognised startups for the purpose of levying income tax.