A Private company issued 50,000 shares at a price of ₹ 40 whereas the fair market value of the shares was ₹ 25. The amount was not taxable as income as the company claimed to be a Startup and claimed exemption under clause (of section 56(2)(viib). However, it had failed to comply with the conditions necessary for availing exemption. The amount of penalty will be:
A. ₹ 7,50,000
B. ₹ 15,00,000
C. 200% of tax on ₹ 7,50,000
D. 300% of tax on ₹ 7,50,000
Answer:C
A Private company issued 50,000 shares at a price of ₹ 40 whereas the fair market value of the shares was ₹ 25. The amount was not taxable as income as the company claimed to be a Startup and claimed exemption under clause (of section 56(2)(viib). However, it had failed to comply with the conditions necessary for availing exemption. The amount of penalty will be:
A. ₹ 7,50,000 B. ₹ 15,00,000 C. 200% of tax on ₹ 7,50,000 D. 300% of tax on ₹ 7,50,000