The Finance Act 2016 amended the definition of 'distributed
income', with effect from 1 June 2016, to mean
consideration paid by the company on buy back of shares as reduced
by the amount, which was received by the company for the issue of
such shares, determined in the manner as may be prescribed.
In this regard,Central Board of Direct Taxes (CBDT) had put
forth draft rules (on 25 July 2016) prescribing the manner of
determining the amount received by the company in respect of shares
under various circumstances. The CBDT had asked the general public
and stakeholders to share their comments and suggestions on the
draft. Based on these the CBDT has now finalised the rules for
valuing the amount of receipt in various circumstances vide
notification no. 94/2016 (F. No. 370133/30/2016 – TPL) dated
17 October 2016.
