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Certificate of Fair Market Value (FMV) in Pune

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

Documents: audited balance sheet, shareholding, financials, projections (for DCF).

Fees: starting from INR 9,999 (Exl GST and Govt. Charges), UDIN-verified.

For: share transfers, ESOP, mergers, and income-tax compliance under Rule 11UA.

Timeline: 3 to 7 working days depending on method and data.

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Certificate of Fair Market Value in Pune: Overview

📌 TL;DR - FMV Certificate Services at a Glance

A certificate of fair market value determines the FMV of unquoted shares under Rule 11UA of the Income-tax Rules, using the NAV or DCF method. It is used for share transfers, ESOP valuation, mergers, and income-tax compliance. Angel tax under Section 56(2)(viib) was abolished from FY 2025-26, but Rule 11UA still applies to transfers.

Whenever unquoted shares change hands - a founder transfers shares, a company grants ESOPs, two companies merge, or the tax law requires a fair value - the price has to stand up to scrutiny. A certificate of fair market value provides that, valuing the shares under Rule 11UA of the Income-tax Rules.

The angel tax on share premium under Section 56(2)(viib) was abolished from FY 2025-26, but Rule 11UA's fair value still governs share transfers, ESOP perquisites, and more. This page explains the methods, the current legal position, and how Patron Accounting issues the certificate.

Parameter	Detail
What it is	FMV of unquoted shares under Rule 11UA
Methods	NAV (by CA) or DCF (by merchant banker)
Used for	Share transfers, ESOP, mergers, tax compliance
56(2)(viib) angel tax	Abolished from FY 2025-26 (Finance Act 2024)
Still applies to	Sec 50CA and Sec 56(2)(x) transfers, ESOP
Starting fee	INR 9,999 (Exl GST and Govt. Charges)

Content is reviewed quarterly for accuracy.

What Is a Certificate of Fair Market Value

Definition: It is a certificate determining the fair market value of unquoted shares (or other property) as on a valuation date, computed under Rule 11UA of the Income-tax Rules, 1962, using a prescribed method.

Rule 11UA prescribes the methods. The Net Asset Value (NAV) method derives FMV from the company's balance sheet using the formula FMV = (A+B+C+D-L) x PV/PE, and can be certified by a Chartered Accountant. The Discounted Cash Flow (DCF) method values the shares on projected future cash flows and must be certified by a SEBI-registered merchant banker. For non-resident investors, five further methods were added in September 2023, with a merchant-banker report valid if dated within ninety days of the share issue and a ten percent safe harbour.

A key update: Section 56(2)(viib), the angel tax on share premium, was abolished from FY 2025-26 by the Finance Act, 2024, so issuing shares above FMV no longer attracts that tax. However, Rule 11UA's FMV continues to apply to share transfers under Section 50CA and Section 56(2)(x), to ESOP perquisite valuation, and to merger and FEMA pricing. The valuation draws on the company's audited financials and accounting records.

Key Terms for FMV Certificate:

Rule 11UA: prescribes FMV methods for unquoted shares.
NAV method: balance-sheet based, CA-certifiable.
DCF method: cash-flow based, merchant-banker certified.
Section 56(2)(viib): angel tax, abolished from FY 2025-26.

Rule 11UA NAV / DCF

Who Needs It and When

A certificate of fair market value is needed when:

Unquoted shares are transferred and Section 50CA or Section 56(2)(x) requires FMV.
A company grants or allots ESOPs and needs a perquisite valuation.
Two companies merge, demerge, or restructure and need a share value.
A buyback, gift, or related-party share transaction needs a defensible value.
A FEMA transaction (FDI or transfer with a non-resident) needs a pricing valuation.

What Patron Accounting Delivers

Service	What We Do
Rule 11UA FMV valuation	FMV valuation of unquoted shares under Rule 11UA.
NAV-method certificate	NAV-method certificate by a Chartered Accountant.
DCF coordination	Coordination for a DCF report by a SEBI-registered merchant banker where required.
Transaction-specific valuation	Valuation for ESOP perquisite, share transfer, merger, and FEMA pricing.
Component computation	Computation of the (A+B+C+D-L) components, including subsidiary and property adjustments.
CA certification	CA certificate with signature, seal, membership number, and 18-digit UDIN.

Our Process

Step-by-Step Process

How we move from confirming the purpose and method to issuing a UDIN-backed Rule 11UA fair market value certificate.

Step 1

Confirm purpose and method

Confirm the purpose (transfer, ESOP, merger, FEMA) and the valuation date and method.

Purpose fixedMethod chosen

Scope01

Step 2

Collect financials

Collect the audited balance sheet, shareholding, financials, and projections (for DCF).

Financials inCap table ready

Data02

Step 3

Compute NAV

For NAV, compute FMV under Rule 11UA using the (A+B+C+D-L) x PV/PE formula, adjusting for subsidiaries and immovable property.

Rule 11UAComponents adjusted

NAV03

Step 4

Coordinate DCF

For DCF, coordinate the merchant-banker report on projected cash flows.

DCF reportMerchant banker

DCF04

Step 5

Verify inputs

Verify the inputs under the applicable standards and reconcile to the books.

Inputs verifiedReconciled

Verify05

Step 6

Issue with UDIN

Issue the FMV certificate with the valuation basis and UDIN.

Certificate issuedUDIN added

Issued06

Documents Checklist

Document	Why it is needed
Audited balance sheet (valuation date)	NAV computation base
Shareholding pattern / cap table	Per-share value
Latest financial statements	Asset and liability values
Subsidiary financials (if any)	Component C adjustment
Immovable property details	Component D adjustment
Business projections (for DCF)	DCF valuation

Common Challenges and How We Solve Them

Challenge	Impact	How Patron Accounting Solves It
Subsidiary and property adjustments missed	Understated or overstated FMV.	We correctly value components C and D, the areas most often overlooked.
Wrong method for the purpose	Valuation can be challenged.	We select NAV or DCF (with a merchant banker) appropriate to the transaction.
Stale valuation date	DCF report out of window.	We keep the DCF report within the ninety-day window for share issues.
Outdated angel-tax assumptions	Wrong tax treatment.	We apply the current law, with Section 56(2)(viib) abolished from FY 2025-26.

Fees

Fee Component	Amount
Patron Accounting Professional Fees	Starting from INR 9,999 (Exl GST and Govt. Charges)
Method and complexity scope	Reflects NAV or DCF, company complexity, subsidiary and property holdings
SEBI-registered merchant banker DCF report	Priced separately where a DCF valuation is required

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.

Time Taken

Stage	Estimated Timeline
NAV-method certificate	Typically 3 to 5 working days
DCF valuation (merchant banker)	Longer, depending on projections and review
Certificate issuance with UDIN	On completion of valuation

A NAV-method certificate typically takes 3 to 5 working days once the audited financials and shareholding are ready. A DCF valuation involving a merchant banker and projections may take longer, depending on the data and review.

Key Benefits

Benefits of Professional Issuance

Defensible, compliant value

A defensible, Rule 11UA-compliant value that withstands tax scrutiny.

Right method and adjustments

Correct method and component adjustments for the transaction.

Current-law treatment

Current-law treatment, reflecting the angel-tax abolition and the 2026 transition.

Accountable CAs

ICAI-registered CAs accountable under the Chartered Accountants Act, 1949.

Why Pune Companies Choose Patron Accounting

10,000+ clients served, 4.9 average rating, 50,000+ documents delivered, 15+ years of experience. Our Pune team supports startups, private companies, and investors across Hinjewadi, Baner, Kharadi, and Magarpatta with share valuations for transfers, ESOPs, and restructuring.

With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves businesses across India - both in-person and remotely.

NAV vs DCF Method

Aspect	NAV method	DCF method
Basis	Balance-sheet net assets	Projected future cash flows
Certified by	Chartered Accountant	SEBI-registered merchant banker
Best for	Asset-heavy, stable companies	Growth and startup valuations
Formula / input	(A+B+C+D-L) x PV/PE	Discounted projections

Related Services

Startup Registration - DPIIT recognition and structuring.
Statutory Audit Services - audited base for valuation.
Private Limited Company Registration - entity setup.
ESOP Valuation Services - perquisite valuation for option grants.
Online Accountant Service - records and reconciliation.

Legal and Standards Framework

Rule 11UA, Income-tax Rules, 1962: prescribes the FMV of unquoted shares using the NAV and DCF methods, with additional methods for non-resident investors.
NAV formula: FMV = (A+B+C+D-L) x PV/PE, where component C captures subsidiary holdings and component D the immovable property adjustment.
DCF and merchant banker: the DCF report must be certified by a SEBI-registered merchant banker, valid within ninety days of a share issue.
Section 56(2)(viib) abolished: the angel tax on share premium was abolished from FY 2025-26 by the Finance Act, 2024; Rule 11UA still applies to transfers under Sections 50CA and 56(2)(x).
Income-tax Act, 2025: effective 1 April 2026, it renumbers provisions while the substantive Rule 11UA framework remains intact for FY 2026-27. See the Income Tax Department and verify CA documents on the ICAI UDIN portal.

What is a certificate of fair market value?

It is a certificate determining the fair market value of unquoted shares, or other property, as on a valuation date, computed under Rule 11UA of the Income-tax Rules, 1962, using a prescribed method. The Net Asset Value method derives the value from the company's balance sheet and can be certified by a Chartered Accountant, while the Discounted Cash Flow method values future cash flows and must be certified by a SEBI-registered merchant banker. It carries a UDIN.

Is angel tax under Section 56(2)(viib) still applicable?

No. Section 56(2)(viib), the angel tax on share premium received by closely held companies, was abolished from FY 2025-26 by the Finance Act, 2024. Companies issuing shares at a premium from 1 April 2025 onward do not attract this tax, regardless of DPIIT recognition. However, Rule 11UA's fair market value continues to apply to share transfers under Section 50CA and Section 56(2)(x), to ESOP perquisite valuation, and to merger and FEMA pricing.

What is the difference between the NAV and DCF methods?

The Net Asset Value method derives the fair value from the company's balance sheet using the formula FMV equals A plus B plus C plus D minus L, times paid-up value over paid-up equity, and a Chartered Accountant can certify it. The Discounted Cash Flow method values the shares on projected future cash flows discounted to present value, must be certified by a SEBI-registered merchant banker, and is commonly used for startups and growth companies where future potential matters more than book value.

Who can issue an FMV certificate?

Under Rule 11UA, the NAV-method valuation of unquoted equity shares can be certified by a Chartered Accountant, while the DCF-method valuation must be certified by a SEBI-registered merchant banker. The choice depends on the transaction and the method required. For a share transfer or an ESOP perquisite, a CA's NAV certificate is common, whereas a startup raising on future potential typically needs a merchant-banker DCF report. The certificate carries a verifiable UDIN.

When is an FMV certificate needed?

It is needed whenever unquoted shares must be valued for tax or regulatory purposes - a share transfer where Section 50CA or Section 56(2)(x) applies, an ESOP grant requiring a perquisite valuation, a merger, demerger, or buyback, a gift or related-party transaction, or a FEMA transaction with a non-resident requiring pricing. Even where angel tax no longer applies, a documented Rule 11UA valuation supports the price and reduces the risk of a dispute on assessment.

How fast can Patron Accounting issue it in Pune?

A NAV-method certificate typically takes three to five working days once the audited balance sheet and shareholding are ready, including the subsidiary and immovable-property component adjustments. A DCF valuation involving a SEBI-registered merchant banker and business projections may take longer. We confirm the correct method for your transaction, apply the current law after the angel-tax abolition, and issue the certificate with a UDIN. Our Pune team works in-person and remotely.

Quick Answers

What: FMV of unquoted shares under Rule 11UA, by NAV or DCF.
Note: angel tax under 56(2)(viib) abolished FY 2025-26; Rule 11UA still applies to transfers and ESOP.
Starting fee: INR 9,999 (Exl GST and Govt. Charges).

Fix the Valuation Before the Transaction

Share transfers, ESOP grants, and restructurings have closing dates, and a valuation that is stale or computed on the wrong basis can be challenged on assessment. Fix the valuation date, choose the right method, and keep a DCF report within the ninety-day window for share issues. A documented Rule 11UA value, prepared before the transaction, is the cleanest defence against a later dispute.

Get your Rule 11UA FMV certificate - Call +91 945 945 6700 or request a free quote on WhatsApp.

Get Your Rule 11UA FMV Certificate in Pune

Even with angel tax gone, fair market value remains central to how unquoted shares are taxed and transacted. A Rule 11UA certificate - NAV by a CA, or DCF by a merchant banker - gives a defensible value for transfers, ESOPs, and restructuring. Prepared correctly, with the right components and the current law, it protects the price and the parties.

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FMV Certificate Across India

Rule 11UA fair market value certificates in Pune and other major cities.

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

This page is reviewed quarterly given the abolition of Section 56(2)(viib) and the Income-tax Act, 2025 transition effective 1 April 2026.

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