Heads Up Consulting P. Ltd.

07/09/2022

Gearing up for the rest of the week with the training on "Filings under Economic Substance Regulations".

05/09/2022

Happy Teachers' Day! We thank you today and every day!

31/08/2022

Ganpati Bappa Morya! May the blessings of Shri Ganesh be with you and your family forever.

25/08/2022

Taking the day head-on with mid-week training on “Provisions of Advance tax and Interest”.

23/08/2022

15/08/2022

11/08/2022

03/08/2022

“Wed-Nes-Day. Win-This-Day.” Winning the day with mid-week training on "Determination of Residential Status under the Indian Taxation System".

02/08/2022

29/07/2022

Happy Birthday Dev Dutt Sanadhay and Pradyumn Gupta! Wish you a lifetime of joy, success, and an abundant supply of cakes.

28/07/2022

Angel tax has always been a vexed issue due to high level of subjectivity involved in valuation of shares of a closely held company. The complexity increases where a company issues hybrid instruments like Compulsorily Convertible Debentures (CCDs) to raise funds.

Angel tax is the tax charged on a closely held company when it receives consideration for issue of shares to a resident person at a price in excess of fair market value (‘FMV’).

Fundamentally speaking, when a closely held company (private limited company) issues shares to its shareholders at a premium, and the issue price (i.e. face value + premium) is in excess of FMV of the shares, then such excess amount shall be considered as taxable income of the Company.

Angel taxation gave rise to a lot of controversies and high-pitched assessments in recent past. While some issues were addressed by the Government, many remain unaddressed. This post deals with one such practical aspect - where shares were issued by a private limited company upon conversion of CCDs issued in the past.