CBDT inserts new Rule 11UAB for determination of fair market value (FMV) of inventory converted in to capital Assets

CBDT inserts new Rule 11UAB for determination of fair market value (FMV) of inventory converted in to capital Assets

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CBDT inserts new Rule 11UAB for determination of fair market value (FMV) of inventory converted in to capital Assets

CBDT inserts new Rule 11UAB for determination of fair market value (FMV) of inventory for the purposes of newly inserted Sec. 28(via);

Prescribes that the FMV of the inventory, being land or building or both, shall be the stamp duty valuation of such immovable property on the date on which the inventory is converted into capital asset; For inventory, being jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, shares or securities referred to in rule 11UA, new Rule prescribes that the valuation shall be as per rule 11UA (which prescribes FMV valuation rules for the purposes of Sec. 56);
Lastly, for inventories other than specified above, new Rule provides that the FMV shall be the price that such property would ordinarily fetch on sale in the open market on the date of conversion; Separately, amends Rule 11U (which defines various expressions used in FMV determination),
 the amended Rule now differentiates between Indian company and foreign company with respect to ‘balance-sheet’ definition for cases other than for unquoted shares valuation under Rule 11UA(2); New / amended Rules shall come into force from April 1, 2019 and shall apply in relation to AY 2019-20 and subsequent years.

 

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