Income-tax Rule 57 — Asset-by-asset prescribed FMV methods

57. Determination of fair market value.– For the purpose of following sections referred to in column B of the Table below, the fair market value of the property of the nature referred to column C shall be determined in the manner provided in column D thereof: Table Sl. Section Nature of Property Manner of determination of Fair Market Value No A B C D 1 Sections Jewellery (a) The price which such jewellery would fetch, if sold in 26(2)(j) the open market on the valuation date; or and 92. (b) if the jewellery is received by way of purchase from a registered dealer on the valuation date, the invoice value of such jewellery; or (c) if the jewellery is received by any other mode and its value exceeds ₹50,000, the assessee may obtain a report from a registered valuer regarding the price it would fetch, if sold in the open market on the valuation date. 2 Sections Archaeological collections, (a) The price which such artistic work would fetch, if sold in 26(2)(j) drawings, paintings, sculptures the open market on the valuation date; or and 92. or any work of art (herein (b) if the artistic work is received by way of purchase from a referred as artistic work) registered dealer on the valuation date, the invoice value of such artistic work; or (c) if the artistic work is received through any other means and its value exceeds ₹50,000, the assessee may obtain a report from a registered valuer regarding the price it would fetch, if sold in the open market on the valuation date. 3 Sections Quoted shares and securities (a) If the quoted shares and securities are received by way of 26(2)(j) transaction carried out through any recognised stock and 92. exchange, the fair market value of such shares and securities shall be the transaction value as recorded in such stock exchange; or (b) if such quoted shares and securities are received by way of transaction carried out other than through any recog- nised stock exchange, their fair market shall be– (A) the lowest price of such shares and securities quoted on any recognised stock exchange on the valuation date; and (B) in cases, where on the valuation date, there is no trad- ing in shares and securities on any recognised stock exchange, the lowest price of such shares and securi- ties on any recognised stock exchange on a date im- mediately preceding the valuation date when such shares and securities were traded on such stock ex- change. 4 Sections Unquoted equity shares Fair market value of unquoted equity shares = (A + B + C + 26(2)(j), 72 D - L) × (PV)/(PE) and 92. Where,– A = book value of all the assets as appearing in the books of the company (other than jewellery, artistic work, shares, securities and immovable property) in the balance sheet as reduced by– (a) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any; and (b) any amount shown as asset including the unamor- tised amount of deferred expenditure which does not represent the value of any asset; B = the price which the jewellery and artistic work would fetch, if sold in the open market on the basis of the valua- tion report obtained from a registered valuer; C = fair market value of shares and securities as determined in the manner provided in this rule; D = the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property; and L = book value of liabilities shown in the balance sheet, but not including the following amounts:– (i) the paid-up capital in respect of equity shares; (ii) the amount set apart for payment of dividends on preference shares and equity shares where such divi- dends have not been declared before the date of transfer at a general body meeting of the company; (iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation; (iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto; (v) any amount representing provisions made for meet- ing liabilities, other than ascertained liabilities; and (vi) any amount representing contingent liabilities oth- er than arrears of dividends payable in respect of cumulative preference shares; PV = the paid-up value of such equity shares; and PE = total amount of paid-up equity share capital as shown in the balance sheet. 5 Sections Unquoted shares and securities The price it would fetch, if sold in the open market on the 26(2)(j), 72 (other than equity shares in a valuation date and the assessee may obtain a report from a and 92. company) which are not listed in merchant banker or an accountant in respect of such valua- any recognised stock exchange tion. 6 Section Immovable property being land The value adopted or assessed or assessable by any authority 26(2)(j) or building or both of the Central Government or a State Government for the purpose of payment of stamp duty in the respect of such immovable property on the valuation date. 7 Section Any other property other than The price that such property would ordinarily fetch on sale 26(2)(j) referred to at Sl. Nos. 1 to 6 in the open market on the valuation date. above.