Tax on Share Premium When Raising Investments [Whiteboard Friday]

Companies raising funding from resident (resident in India) investors should now be cautious as a new tax on excess share premium has been implemented. This has mainly been done in order to curb the black money transactions in the market. Any amount received in excess of fair market value is treated as Income from Other Sources and hence liable to tax.

In this episode of eLagaan Whiteboard Friday, the eLagaan team talks about various aspects of the above tax and some possible work around which may help startups defer the tax liability or help reduce it to a great extent.

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