Buy Back of shares

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2010 We are a Private Limited company in which 85% shares are held by forgien company.

Now we want to do 25% buy back of shares. In this transaction there is huge long term capital gain to forgien company.

Now while remitting the funds out of India to them we are supposed to deduct capital gain..my question is what will be percentage of tax on this ???

Pls advise ASAP.

Thanks

Rajesh Kumar

Rajesh Kumar (Expert)
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04 December 2010 TDS is required to be deducted under Sec. 195. Rate is 20% plus education cess. If the payment is more than 1 crore, surcharge is applicable.
Before making the remittance, you need a certificate from an accountant in form 15CB. The information is required to be uploaded in departmental website- form 15CA. Without such procedure the Bank will not remit the amount.

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Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2011 Thanks for the reply.

Normally on such long term capital gain tax is 10 % but you said that we need to deduct TDS @ 20%+ edu. cess.

I came to know that we can take a special permission from Joint commsioner of IT & deduct the TDS @ 10% i.e special rate.

See actually being a forgien company they can not file a return in India & go for refund.Can you please advise detail process of how we can get such persmission & whether this will work ?

Thanks,

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