Gifting of shares of private limited company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2013 We have outstanding loans from shareholders of a pvt limited company which we want to convert into equity share capital of the company. My query

a) If one shareholder (A) transfers his entire shareholding through a gift deed to other shareholder (B) then whether he is liable for any tax in India ?

b) What if company issues equity shares to shareholder (B) against the loan outstanding due to shareholder (A) based on the consent from shareholder (A). Does it amount to waiver of liability and liable for tax in a pvt ltd company?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 January 2013 a).Share Holder B is liable if fair market value of shares exceed Rs. 50000 and A is not his relative.
.
b) Shares can not be issued by the company
to B on behalf of A without receiving any consideration and consent of A is not a good consideration.

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