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Schedule 2, Rule 6 – The Gift Tax Act, 1958

The Gift Tax Act, 1958


Sch. II , Rule 6




(1) Subject to rule 7, the value of an unquoted equity share in an investment company shall be determined in the manner specified in sub-rule (2).


(2) The value of all the liabilities as shown in the balance sheet of such company shall be deducted from the value of all its assets shown in that balance sheet; the net amount so arrived at shall be divided by the total paid-up equity share capital of the company as shown in the balance sheet, and the result multiplied by the paid-up value of each equity share shall be the value of the unquoted equity share in that investment company for the purposes of this Act.


(3) For the purposes of sub-rule (2), the value of an asset disclosed in the balance sheet of the company shall be taken to be its value determined in accordance with the rules as applicable to that particular asset and, in the absence of any such rule, the value of such asset shall be its value as determined under rule 20 of Schedule III to the Wealth-tax Act.


(4) For the purposes of this rule, –


(a) “balance sheet” has the same meaning as in rule 5;


(b) the amounts referred to in sub-rule (3) of rule 5 shall not be treated as assets or liabilities.


(5) For the purposes of facilitating the valuation of unquoted equity shares under this rule and rule 7, the company concerned shall have such valuation made by its auditors appointed under section 224 of the Companies Act, 1956 (1 of 1956), and a certificate of the auditors relating to such valuation in the prescribed form shall be furnished to the Assessing Officer and the shareholders of the company; and the valuation made by the auditors shall be taken into account in the assessment of the shareholders of the company.


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The Gift Tax Act, 1958


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