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Certificate of Fair Market Value (FMV) in Mumbai

Reviewed by CA and CS Team, Patron Accounting LLP ICAI & ICSI Registered| 15+ Years Experience| Last Updated: Verify Credentials →

Values: unquoted equity and other shares under Rule 11UA, on the valuation date.

For: startups, companies, ESOP holders and shareholders transferring unlisted shares.

Fees: starting from Rs 9,999 (exclusive of GST and government charges).

Timeline: 3 to 7 working days once financials and share details are shared.

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Certificate of Fair Market Value: Overview

📌 TL;DR - FMV Certificate Services at a Glance

A certificate of fair market value (FMV) values unquoted shares under Rule 11UA of the Income-tax Rules. The NAV method can be CA-certified; the DCF method needs a SEBI-registered merchant banker. With angel tax (Section 56(2)(viib)) abolished from FY 2025-26, an FMV certificate is now used for share transfers under Section 50CA, inadequate-consideration cases under Section 56(2)(x), ESOP perquisite valuation and FEMA pricing.

Parameter	Detail
What It Values	Unquoted equity and other shares / securities
Governing Rule	Rule 11UA of the Income-tax Rules
Methods	NAV (CA-certifiable) and DCF (merchant banker)
Current Uses	Section 50CA, Section 56(2)(x), ESOP, FEMA pricing
Valuation Date	The relevant transfer, issue or exercise date
Cost	Starting from Rs 9,999 (Exl GST and Govt. Charges)
Mandatory Field	18-digit UDIN, verifiable at udin.icai.org

A certificate of fair market value is a valuation of unquoted shares and securities determined under Rule 11UA of the Income-tax Rules as on a valuation date. The Net Asset Value (NAV) method can be certified by a Chartered Accountant, while the Discounted Cash Flow (DCF) method requires a report from a SEBI-registered merchant banker.

Although the angel-tax provision was abolished from FY 2025-26, the FMV remains essential for share transfers, ESOP perquisite valuation, inadequate-consideration cases and FEMA pricing. Patron Accounting LLP certifies the FMV with a UDIN.

Content is reviewed quarterly for accuracy.

What Is a Certificate of Fair Market Value?

A certificate of fair market value is a document that states the FMV of unquoted shares or securities of a company, determined under Rule 11UA of the Income-tax Rules as on a valuation date. Because such shares are not traded on a stock exchange, their value is computed using a prescribed method rather than a market quote.

The Net Asset Value method derives value from the company's assets and liabilities and can be certified by a Chartered Accountant, while the Discounted Cash Flow method, based on projected cash flows, requires a SEBI-registered merchant banker. The certificate carries a UDIN where a CA issues it.

The NAV formula under Rule 11UA is broadly (A + B + C + D - L) x PV / PE, where A is the book value of assets, L is liabilities, PV is paid-up value and PE is paid-up equity. We advise which method fits your purpose and coordinate a merchant banker where DCF is required. For employee share plans, see our ESOP valuation services.

Key Terms for FMV Certificate:

Unquoted shares: shares not listed or traded on a recognised stock exchange.
NAV method: FMV from the company's net assets, certifiable by a CA.
DCF method: FMV from projected cash flows, requiring a merchant banker.
Section 50CA: deems FMV as the consideration on transfer of unquoted shares if the actual price is lower.
Valuation date: the date as on which the FMV is determined, such as the transfer or exercise date.

Valued under Rule 11UA, UDIN-verified

Who Needs an FMV Certificate?

Anyone dealing in unlisted shares where tax or regulatory value matters needs one. Common situations include:

Founders and shareholders: transferring unlisted shares in a sale, exit or restructuring.
Recipients of shares: receiving shares below FMV, where Section 56(2)(x) applies.
ESOP holders: exercising options in a private company, where FMV fixes the perquisite.
Companies raising FDI: issuing or transferring shares under FEMA pricing norms.
Family businesses: succession, buyback or gifting of unlisted shares.

Note: the angel-tax provision, Section 56(2)(viib), was abolished from FY 2025-26 for all investors, so a fresh share issue at a premium no longer attracts that tax. The FMV certificate remains important for the situations above.

Our FMV Certificate Services

Service	What We Do
NAV-based FMV certificate	CA-certified valuation of unquoted shares under Rule 11UA.
DCF coordination	We coordinate a SEBI-registered merchant banker where DCF is required.
ESOP perquisite valuation	FMV on the exercise date for perquisite computation.
Section 50CA and 56(2)(x)	Valuation supporting transfer and inadequate-consideration cases.
FEMA pricing support	FMV certification for FDI share issue and transfer.
UDIN-verified certificate	Every CA certificate carries a live, verifiable UDIN.

Our Process

5 Steps to Obtain the FMV Certificate

A clear process from engagement to a Rule 11UA fair market value certificate, NAV-based with UDIN, and merchant-banker coordination where DCF applies.

Step 1

Engagement

Confirm the purpose - transfer, ESOP or FEMA - and the valuation method that fits.

Purpose confirmed Method chosen

Engagement 01

Step 2

Document Submission

Share audited financials, the share register and, for DCF, business projections.

Financials shared Share register

Documents 02

Step 3

Verification

The CA verifies the inputs under SA 500 (Audit Evidence) before valuing.

Verified under SA 500 Inputs checked

Verification 03

Step 4

Valuation

The FMV is computed under Rule 11UA, with a merchant banker engaged for DCF.

Rule 11UA applied NAV or DCF

Valuation 04

Step 5

Certification and UDIN

The CA signs, stamps and generates the UDIN, issuing the FMV certificate.

Signed and stamped Live UDIN

Certified 05

Documents Required: FMV Checklist

Audited balance sheet and financial statements as on the valuation date.
Share register and capital structure, including any preference shares.
Details of assets, including immovable property and investments.
Liabilities and contingent liabilities.
Business projections, where the DCF method is used.
The purpose and the valuation date required.

What the certificate contains: the name of the company and the class of shares or securities valued; the valuation date and the purpose of the valuation; the method used, NAV or DCF, and the basis; the computed fair market value per share; key inputs, such as assets, liabilities or projections relied upon; and the CA name, membership number, firm registration number, signature, seal and UDIN.

Common Challenges and How We Solve Them

Challenge	Impact	How Patron Accounting Solves It
Choosing NAV vs DCF	Wrong method, weak valuation	We advise the method that fits the purpose and law.
DCF needs a merchant banker	Cannot self-certify DCF	We coordinate a SEBI-registered merchant banker.
Valuation date wrongly taken	FMV does not match the event	We fix the FMV on the correct transfer or exercise date.
Inputs not audit-ready	Valuation challenged later	We verify assets, liabilities and projections before valuing.

FMV Certificate Fees

Fee Component	Amount
Patron Accounting Professional Fees	Starting from INR 9,999 (Exl GST and Govt. Charges)
UDIN generation (ICAI)	No separate government charge
DCF method and merchant banker	Additional, quoted where DCF is required
GST	As applicable on professional fees

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free FMV Certificate consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

How Long Does It Take?

Stage	Estimated Timeline
Share audited financials and share details	Day 1
Verification of inputs under SA 500	1 to 2 working days
NAV-based FMV computation and certificate	3 to 7 working days
DCF method with merchant banker	Depends on projections and merchant banker
Certificate aligned to your event	On transaction or ESOP date

Most NAV-based FMV certificates are issued within 3 to 7 working days of receiving audited financials and share details. Where the DCF method and a merchant banker are involved, the timeline depends on the projections and the merchant banker's process. We align the certificate to your transaction or ESOP date so the valuation is ready when you need it.

Key Benefits

Benefits of Professional Valuation

Correct method

NAV or DCF chosen to fit the purpose and the law.

Tax certainty

FMV that supports Section 50CA, 56(2)(x) and ESOP positions.

FEMA-ready

Valuation that meets RBI pricing norms for FDI.

Defensible

Audit-verified inputs and UDIN-backed certification.

Why Companies Trust Patron Accounting

10,000+ Clients | 4.9 Google Rating | 50,000+ Documents Certified | 15+ Years

"We needed an FMV certificate for an ESOP exercise in our private company. Patron computed the value under Rule 11UA on the exercise date, with UDIN, and our perquisite tax position was clean." - CFO, technology startup

Trusted by companies across sectors, including teams at Hyundai, Asian Paints and Bridgestone. With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves companies across India - both in-person and remotely.

NAV vs DCF: Which Method?

Factor	NAV Method	DCF Method
Basis	Net assets on the balance sheet	Projected future cash flows
Who certifies	Chartered Accountant	SEBI-registered merchant banker
Best for	Asset-backed companies, transfers	Startups with growth projections
Report	CA certificate with UDIN	Merchant banker valuation report

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ESOP Services - end-to-end ESOP design and compliance.
Issue of Shares - share allotment and filings.
Net Worth Certificate - CA-certified net worth statement.
Private Limited Company Compliance - ongoing ROC and statutory compliance.

Tax and Compliance Framework

Valuation rule: Rule 11UA of the Income Tax Rules prescribes the FMV of unquoted shares, by the NAV method (CA-certifiable) or the DCF method (SEBI-registered merchant banker).

Current uses: Section 50CA deems FMV as the transfer consideration if lower, Section 56(2)(x) taxes shares received below FMV, and FMV fixes the ESOP perquisite on exercise.

Angel tax: Section 56(2)(viib) was abolished from FY 2025-26 for all investors.

FEMA: the Reserve Bank of India pricing norms for FDI require FMV certification. See RBI and Income Tax India for the rules.

Certification: the ICAI standards apply, with a UDIN verifiable at udin.icai.org.

What is a certificate of fair market value?

It is a document stating the fair market value (FMV) of unquoted shares or securities of a company, determined under Rule 11UA of the Income-tax Rules as on a valuation date. Because the shares are not traded on an exchange, the value is computed by a prescribed method rather than a market quote. The NAV method can be certified by a Chartered Accountant, while the DCF method requires a SEBI-registered merchant banker, and a CA certificate carries a UDIN.

What methods does Rule 11UA allow?

Rule 11UA allows the Net Asset Value (NAV) method, based on the company's assets minus liabilities, and the Discounted Cash Flow (DCF) method, based on projected future cash flows. The NAV method can be certified by a Chartered Accountant, while the DCF method requires a report from a SEBI-registered merchant banker. For non-resident investors, additional methods such as Comparable Company Multiple and Option Pricing are also available.

Who can issue an FMV certificate, a CA or a merchant banker?

It depends on the method. Under the NAV method, a Chartered Accountant can value the unquoted shares and issue the certificate with a UDIN. Under the DCF method, the valuation must be done by a SEBI-registered merchant banker. We advise which method suits your purpose, issue the CA certificate for NAV-based valuations, and coordinate a merchant banker where the DCF method is required.

Is angel tax still applicable?

No. Section 56(2)(viib), commonly called the angel tax, was abolished from FY 2025-26 for all investors, so a fresh issue of shares at a premium above FMV no longer attracts that tax. However, the fair market value of unquoted shares remains important for other purposes, including transfers under Section 50CA, shares received below FMV under Section 56(2)(x), ESOP perquisite valuation and FEMA pricing for FDI.

When do I need an FMV certificate for ESOP?

If you exercise stock options in a private (unlisted) company, the fair market value of the shares on the exercise date determines the perquisite value that is taxable as salary. An FMV certificate under Rule 11UA fixes that value, so the perquisite is computed correctly and the company can deduct the right TDS. We value the shares on the exercise date and certify the FMV with a UDIN.

How much does an FMV certificate cost?

At Patron Accounting, a certificate of fair market value starts from Rs 9,999 (exclusive of GST and government charges). Valuation under Rule 11UA is specialised work, and the fee reflects verification of financials, the valuation method and certification. Where the DCF method and a SEBI-registered merchant banker are required, that cost is additional. The final fee depends on complexity and is confirmed after a review.

What documents are needed for the valuation?

We need the audited balance sheet and financial statements as on the valuation date, the share register and capital structure, details of assets including immovable property and investments, liabilities and contingent liabilities, and, where the DCF method is used, the business projections. We verify these inputs, compute the FMV under Rule 11UA on the correct valuation date, and certify it with a UDIN.

FMV certificate kaise banaye?

Apni audited financials, share register aur (DCF ke liye) projections dijiye; CA Rule 11UA ke NAV method se valuation date par FMV compute karke UDIN ke saath certificate deta hai, aur DCF ke liye SEBI-registered merchant banker coordinate karta hai.

Quick Answers

What is it? FMV of unquoted shares under Rule 11UA.
Methods? NAV (CA) and DCF (merchant banker).
Angel tax? Abolished from FY 2025-26.
Used for? 50CA, 56(2)(x), ESOP, FEMA.
Cost? Starting from Rs 9,999 plus GST.

Get Your FMV Certificate Now in Mumbai

Get your FMV certificate now. Call +91 945 945 6700 or message us on WhatsApp for a free quote. Rule 11UA compliant, UDIN-verified.

Get Your FMV Certificate Today in Mumbai

A certificate of fair market value puts a defensible, Rule 11UA value on your unquoted shares, whether for a transfer, an ESOP exercise, an inadequate-consideration case or FEMA pricing. Even with angel tax abolished from FY 2025-26, getting the method right and the valuation certified protects your tax position.

Patron Accounting LLP, with 15+ years of experience and offices in Pune, Mumbai, Delhi and Gurugram, issues FMV certificates and coordinates DCF valuations for companies across India. 10,000+ Clients | 4.9 Google Rating | 50,000+ Documents Certified.

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Valuation and Certificate Services Across India

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Content Created: 8 June 2026 | Last Updated: | Next Review: 8 December 2026 | Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed on a 6-month cycle and whenever Rule 11UA or CBDT guidance changes, so the information stays current and accurate.

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