Section 56 (2) (vii b) in the Income Tax Act is referred to as:
Angel Tax
The correct answer is Angel Tax.
Section 56(2)(viib) of the Income Tax Act, 1961, deals with the taxation of shares issued at a premium exceeding the fair market value. This is commonly referred to as the "Angel Tax" provision. It aims to curb instances of tax evasion where companies might undervalue their share capital to reduce their tax liability. The provision essentially taxes the difference between the price at which shares are issued and their fair market value, considered as income in the hands of the company.
The other options are incorrect. Angel Funds are investment vehicles, not a specific tax provision. "Normal taxing" and "normal investments" are too broad and don't refer to a specific section of the Income Tax Act.
Similar Questions
- In which of the following years was the Goods and Services Tax (Compensation to States) Bill passed?
Important Questions from Taxation
What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'?
1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves.
3. It will enormously increase the growth and size of the economy of India and will enable it to overtake China in the near future.
Select the correct answer using the codes given below:
The sales tax you pay while purchasing a toothpaste is a
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