FCS Deepak Pratap Singh
Quick Summary
Dear Friends, As you are aware that the term Business Restructuring is composed of two words, Business and Restructuring. We know that the Business, includes trade, commerce, manufacture, profession etc. The word Restructuring means the rearrangement of affairs of a business organization. Reorgan
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FAQ :
A holding company owns a controlling interest (more than 50% of shares or board control) in other companies, known as subsidiaries. A subsidiary company is one whose majority of share capital is held by another company, the holding company.
A transfer of a capital asset between a parent company and its wholly-owned subsidiary (or vice versa) is not considered a taxable transfer if both companies are Indian and the parent holds the entire share capital of the subsidiary.
If the conditions for non-taxable transfer are met, the actual cost of the transferred capital asset to the transferee company is the same as it would have been if the transferor company had continued to hold it.
The exemption can be withdrawn if, within eight years of the transfer, the transferee company converts the asset into stock-in-trade, or if the holding company ceases to hold the entire share capital of the subsidiary.
If the asset is converted into stock-in-trade by the transferee company within eight years of the transfer, the exemption is withdrawn, and the profit from the original transfer becomes taxable as capital gains.
No, holding and subsidiary companies are treated as independent legal entities and are not considered a single unit for all purposes. For example, a holding company is generally not liable for the provident dues or wages of its subsidiary.
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