Trade Credits Under FEMA: Buyers Credit, Suppliers Credit & Compliance 📌 Quick Answer: Trade credits under FEMA are credit facilities extended by overseas suppliers, banks, or financial institutions to Indian importers for payment of imports. They are classified into Buyers Credit (credit arranged by the importer from an overseas bank or financial institution) and Suppliers […]
Category Archives: Business Model
Business Model
Cross-Border Gift of Shares: FEMA & Tax Implications 📌 Quick Answer: A cross-border gift of shares — whether from an Indian resident to a non-resident, or vice versa — must comply with both FEMA Non-Debt Instrument (NDI) Rules, 2019 and the Income Tax Act. Under FEMA, gifting of shares of an Indian company by a […]
Sweat Equity Valuation: Section 54(1)(d), SEBI SBEB & Tax 📌 Quick Answer: Sweat equity shares are shares issued by a company to its directors or employees at a discount or for consideration other than cash, in recognition of their contribution through intellectual property rights or value addition. Under Section 54(1)(d) of the Companies Act, 2013, […]
Slump Sale Valuation: Section 50B, Ind AS & Net Worth Computation 📌 Quick Answer: A slump sale is the transfer of an undertaking as a going concern for a lump sum consideration without assigning individual values to assets and liabilities. Under Section 50B of the Income Tax Act, the capital gain on a slump sale […]
Distressed Company Valuation: IBC, Liquidation & Going Concern 📌 Quick Answer: How are distressed companies valued under India’s IBC framework? Under the Insolvency and Bankruptcy Code, 2016, distressed companies are valued at two levels: fair value (going-concern basis) and liquidation value (piecemeal-sale basis). The resolution professional must appoint two IBBI Registered Valuers under Regulation 27 […]
Valuation for Stamp Duty: State Rules, DLC Rate & Challenge Process 📌 Quick Answer: Stamp duty on property transactions in India is computed based on the higher of the actual transaction value or the government-prescribed value (variously called the circle rate, DLC rate, ready reckoner value, or guideline value, depending on the state). Under Section […]
AIF & PMS Portfolio Valuation: SEBI Guidelines & NAV Computation 📌 Quick Answer: Alternative Investment Funds (AIFs) and Portfolio Management Services (PMS) in India are required to value their portfolio investments at fair value in accordance with SEBI guidelines and applicable accounting standards. AIFs must compute and report Net Asset Value (NAV) at least once […]
Family Business Succession: Valuation, HUF & Will Planning 📌 Quick Answer: Family business succession planning in India involves the structured transfer of ownership and management of a business from one generation to the next. Effective succession requires three pillars: business valuation (to determine fair allocation among successors), legal structuring (using wills, trusts, HUF partitions, family […]
NRI Real Estate Investment in India: FEMA Rules, Repatriation & Tax — Complete Guide Quick Answer NRIs and OCI cardholders can freely purchase residential and commercial property in India under the general permission granted by FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, 2018. Agricultural land, farmhouses, and plantation property require specific RBI […]
Virtual CFO Services: Scope, Deliverables & When Startups Need One 📌 Quick Answer: A virtual CFO (vCFO) provides fractional, outsourced chief financial officer services to startups and growing companies that need strategic financial leadership but cannot justify or afford a full-time CFO. The scope typically includes financial planning and analysis (FP&A), MIS reporting, cash flow […]