HOLDING AND SUBSIDARY COMPANY
This query is : Resolved
23 April 2010
HI ALL,,,
CAN A HOLDING COMPANY SELLS ITS STOCK TO ITS 100% SUBSIDARY COMPANY.
WHAT PRECAUTIONS ARE REQUIRED TO BE TAKEN BY BOTH THE COMPANIES.
FROM INCOME TAX POINT OF VIEW
PLEASE REPLY
THANKS ALLL
CAN A HOLDING COMPANY SELLS ITS STOCK TO ITS 100% SUBSIDARY COMPANY.
WHAT PRECAUTIONS ARE REQUIRED TO BE TAKEN BY BOTH THE COMPANIES.
FROM INCOME TAX POINT OF VIEW
PLEASE REPLY
THANKS ALLL
VIKAS AGGARWAL
(Expert)
23 April 2010
Dear haresh,
Holding company can sell the stock to subsidary company but on arm's lenght price. otherwise the transaction can come under the sacn of section 40A(2)(a) of the income tax act.
Holding company can sell the stock to subsidary company but on arm's lenght price. otherwise the transaction can come under the sacn of section 40A(2)(a) of the income tax act.
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