In exercise of the powers conferred by section 295 read with Explanation (i) to clause (ba) of sub-section (1) of section 115WC of the Income-tax Act, 1961 (43 of 1961), read with section 22 of the General Clauses Act, 1897 (10 of 1897), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Twelfth Amendment) Rules, 2007.
(2) They shall come into force with effect from the 1st day of April, 2008.
2. In the Income-tax Rules, 1962, after Part VII B, the following shall be inserted, namely:-
PART VII C
FRINGE BENEFIT TAX
Valuation of specified security or sweat equity share being a share in the company.
40C. (1) For the purposes of clause (ba) of sub-section (1) of section 115WC, the fair market value of any specified security or sweat equity share, being an equity share in a company, on the date on which the option vests with the employee, shall be determined in accordance with the provisions of sub-rule (2) or sub-rule (3).