At what point of time is Valuation required to be done for FDI/ODI transactions?

Valuation done for FDI/ODI transactions is valid for a period of 90 Days. Therefore, the transaction should be completed within 90 Days from Date of Valuation.

Who can do Valuation for FDI purposes?

In case of an unlisted Indian company – A SEBI Registered Merchant Banker or a CA

Who can do Valuation for FDI purposes?

Who can do Valuation for FDI purposes?- In case the investment being made exceeds USD 5 million – ONLY a SEBI Registered (Cat-1) Merchant Banker
– In case investment is by way of swap or shares and foreign company is involved – ONLY a SEBI Registered (Cat-1) Merchant Banker
– In all other cases – Chartered Accountant or Certified Public Accountant

Does a listed company require a valuation at the time of the issuance of Sweat Equity?

Yes, a listed company requires a valuation certificate from a Merchant Banker at the time of issuance of sweat equity shares to comply with Securities and Exchange Board Of India (Share Based Employee Benefits And Sweat Equity) Regulations, 2021.

Does slump sale require two valuation certificates?

Yes, in accordance with Section 50B of the Income Tax Act, 1961 read with rule 11UAE, two distinct fair valuations are mandated. The first involves the formula driven valuation, certificate is obtained by a Merchant Banker. The second pertains to the valuation of consideration received, which must be carried out by a qualified merchant banker or registered valuer.

Is there a requirement for Merchant Banker certificate in Transfer pricing valuation?

No, Transfer pricing needs to be submitted by an Accountant in transfer pricing transaction.

Who is AD Bank?

An AD bank, or Authorized Dealer bank, is a financial institution that has been authorized by the Reserve Bank of India (RBI) to deal in foreign exchange transactions. AD banks are important for facilitating cross-border transactions, such as imports and exports, by acting as intermediaries between exporters and importers.

Is valuation certificate is required if an Indian entity wants to restructuring of its foreign subsidiary?

Yes, it requires certification by a Registered Valuer or an equivalent authority in the host country for the compliance of Rule 18 of Foreign Exchange Management (Overseas Investment) Rules, 2022.

Who can do the valuation at the time of preferential allotment of Shares?

– To comply with provisions of Companies Act, 2013, an IBBI Registered Valuer can do the valuation in case of Listed and Unlisted entities.
– To comply with the Income Tax provisions, SEBI Registered Category I Merchant Banker can do the valuation and it’s only required in case of Unlisted companies.

Which entity is required to do valuation at the time of exercise of ESOPs for Tax Perquisite?

To comply with Clause (vi) of Sub-section (2) of Section 17 of the Indian Income Tax Act, 1961, only unlisted companies are required to take valuation certificate from SEBI Registered Merchant Banker.