Private equity (PE) and venture capital (VC) deals in India may be hit once a Central Board of Direct Taxes (CBDT) formula to determine the fair market value of shares for calculating tax comes into effect after the finance Bill is passed in Parliament. Finance minister Pranab Mukherjee in his February Budget had proposed that a firm which buys shares at a price lower than the fair market value of such shares will have to pay tax on the difference between the two. He did not define fair value. The board issued a notification on 8 April saying the fair market value of unlisted shares will be calculated based on a formula that uses the net asset value methodology, based on the difference between assets and liabilities appearing on the balance sheet. […]