Rule 57 of the Draft Income-tax Rules, 2026 lays down a structured framework for determining the Fair Market Value (FMV) of specified properties for the purposes of Sections 92, 79, and 26(2)(xi)/(j). For jewellery and artistic works such as paintings, sculptures, drawings, and archaeological collections, FMV is the open market price on the valuation date; if purchased from a registered dealer on that date, the invoice value applies, and where acquired otherwise and the value exceeds ₹5,00,000, the assessee may obtain a registered valuer’s report. For quoted shares and securities, FMV is the transaction value if traded through a recognized stock exchange; otherwise, it is the lowest quoted price on the valuation date or, if no trading occurred, the lowest price on the immediately preceding trading date. Unquoted equity shares are valued using a prescribed formula: (A + B + C + D − L) × (PV) ÷ (PE), where A represents adjusted book value of assets, B the valuer-based market price of jewellery and artistic works, C the FMV of shares and securities, D the stamp duty value of immovable property, and L specified liabilities subject to defined exclusions; PV and PE relate to paid-up share values. Unquoted shares (other than equity shares) not listed on a recognized stock exchange are valued at open market price determined by a merchant banker or accountant. Immovable property is valued at the stamp duty value adopted or assessable by the government authority, while any other property is valued at its ordinary open market price on the valuation date.
Extract of Rule No. 57 of Draft Income-tax Rules, 2026
Rule 57
Determination of Fair Market Value
For the purpose of the sections referred to in column B of the Table below, the fair market value of the property of the nature referred to column C shall be determined in the manner provided in column D thereof:
TABLE
| Sl. No. | Section | Nature of Property | Manner of Determination of Fair Market Value (FMV) |
| 1 | (i) Section 92
(ii) Section 26(2)(xi) |
Jewellery | (a) The price which such jewellery would fetch if sold in the open market on the valuation date.
(b) If received by way of purchase from a registered dealer on the valuation date, the invoice value. (c) If received by any other mode and value exceeds ₹5,00,000, the assessee may obtain a report from a registered valuer regarding the price it would fetch if sold in the open market on the valuation date. |
| 2 | (i) Section 92
(ii) Section 26(2)(xi) |
Archaeological collections, drawings, paintings, sculptures or any work of art (hereinafter referred as artistic work) | (a) The price which such artistic work would fetch if sold in the open market on the valuation date.
(b) If received by purchase from a registered dealer on the valuation date, the invoice value. (c) If received through any other means and value exceeds ₹5,00,000, the assessee may obtain a report from a registered valuer regarding the price it would fetch if sold in the open market on the valuation date. |
| 3 | (i) Section 92
(ii) Section 26(2)(xi) |
Quoted shares and securities | (a) If transaction carried out through any recognized stock exchange, FMV shall be the transaction value recorded in such exchange.
(b) If transaction carried out other than through any recognized stock exchange: A. Lowest price of such shares and securities quoted on any recognized stock exchange on the valuation date; and B. If no trading on valuation date, the lowest price on any recognized stock exchange on a date immediately preceding the valuation date when such shares and securities were traded. |
| 4 | (i) Section 92
(ii) Section 79 (iii) Section 26(2)(j) |
Unquoted equity shares | FMV = (A + B + C + D − L) × (PV) ÷ (PE)Where:
A = Book value of all assets (other than jewellery, artistic work, shares, securities and immovable property) in balance sheet, reduced by: (a) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any; and (b) Any asset including unamortised deferred expenditure not representing value of any asset B = Price jewellery and artistic work would fetch if sold in open market (based on registered valuer report) C = FMV of shares and securities as determined above D = Value adopted/assessed/assessable by Government authority for stamp duty purposes for immovable property L = Book value of liabilities excluding: i. the paid-up capital in respect of equity shares ii. the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company iii. reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation iv. any amount representing provision for taxation, other than amount of income tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto v. any amount representing provisions made for meeting liabilities, other than ascertained liabilities vi. any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares. PV = Paid-up value of such equity shares PE = Total paid-up equity share capital shown in balance sheet |
| 5 | (i) Section 92
(ii) Section 79 (iii) Section 26(2)(j) |
Unquoted shares and securities (other than equity shares in a company) not listed on recognized stock exchange | The Price they would fetch if sold in open market on valuation date as determined by a merchant banker or accountant. |
| 6 | Section 26(2)(j) | Immovable property (land or building or both) | The Value adopted or assessed or assessable by Central Government or State Government authority for stamp duty purposes on valuation date. |
| 7 | Section 26(2)(j) | Any other property not referred above | The Price such property would ordinarily fetch if sold in open market on valuation date. |
