Cap gain on startup sale of shares

This query is : Resolved

CA Kunjan - www.canaresh.com (Querist)
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25 April 2022 can promoters sell their 50% share in pvt ltd startup without paying cap. gain tax?
Should investor invest directly in pvt ltd company ?
but in this case, promoters cant get back money, right?
promoters dont want salary /remuneration etc.
my view-->unfortunately, there is no way promoters can avoid cap.gain tax
regards, ca kunjan

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 April 2022 Capital gains tax applicable on sale by promoters. It can't be avoided. Promoters can get back money on sale.

CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
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02 May 2022 an afterthought--> can company issue shares at premium to existing shareholders? so promoter's cost increases before they sell to new investor. i think its possible... ty sir

CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
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02 May 2022 i just read--> as co is unlisted, premium has to be such that issue price should be above fair value of shares, u/s. 56(2)(Viib)

so prima facie, it seems tuff to avoice cap.gain tax in unlisted co. (unless investor is venture fund or something).

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 May 2022 For the old holding earlier cost only will be considered.

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