Purchasing of company shares
This query is : Resolved
04 December 2014
A Pvt ltd, Holding foreign Capital of Rs. 1 core as 100% Shares, intend to sale the company for 10 lakhs i.e 100% shares for Rs. 10 lakhs.
What will be the Income Tax.??
What will be the Income Tax.??
04 December 2014
What is the fair VALUE of the share? You need to compute the same.
Not able to get the relevance between 1 crore and 10 lakh? Can you please clarify?
Not able to get the relevance between 1 crore and 10 lakh? Can you please clarify?
04 December 2014
1. Total Capital Invested Capital is 1 Core / share Value for Rs. 10 each.
2. Company made Two years Losses of Rs 20 Lakhs.
3. Now that Foreign Subsidiary Company in India agreed to sale this company for Rs. 10 lakhs to any Indian Individual Company.
Total Capital Invested 1 Core
Less: Two Years Loss Rs. 20 Lakhs.
Balance Capital Rs. 80 Lakhs.
Offer to Sale for Rs. 10 Lakhs.
I think It is clear
2. Company made Two years Losses of Rs 20 Lakhs.
3. Now that Foreign Subsidiary Company in India agreed to sale this company for Rs. 10 lakhs to any Indian Individual Company.
Total Capital Invested 1 Core
Less: Two Years Loss Rs. 20 Lakhs.
Balance Capital Rs. 80 Lakhs.
Offer to Sale for Rs. 10 Lakhs.
I think It is clear
04 December 2014
Not really.
Any way my concern for asking the clarity was if the transaction is HIT by TRANSFER PRICING provisions.
I think, YES, the transation is covered under TRANSFER PRICING since you are using the WORD "FOREIGN subsidiary Company in India"
You will require to get the market/fair value of the share. A discounted cash flow technique is used for this.
Any way my concern for asking the clarity was if the transaction is HIT by TRANSFER PRICING provisions.
I think, YES, the transation is covered under TRANSFER PRICING since you are using the WORD "FOREIGN subsidiary Company in India"
You will require to get the market/fair value of the share. A discounted cash flow technique is used for this.
04 December 2014
What will be The Taxes to be paid by the Parent company of this subsidiary . like this transaction
04 December 2014
I think It does not HIT Transfer Pricing, because. the Indian company having its 100% holding by Foreign company.
is intend to sale to other Indian Company,
buyer of this Company is not associated enterprise.
is intend to sale to other Indian Company,
buyer of this Company is not associated enterprise.
04 December 2014
Assuming the DCF value comes to INR 12 per share where as you are selling it at INR 1.
It has to pay income tax on sale of shares.
Get a REPORT from CA u/s 92E
It has to pay income tax on sale of shares.
Get a REPORT from CA u/s 92E
04 December 2014
That Means if Total Nos of Shares are 1,00,000/- of Rs 12 each
Selling Price of Per Share is Rs. 1 Each,
then total Sale Price will
1,00,000 X Rs. 1 each = Rs: 1,00,000/-
Than Income Tax will @ 30% on Selling Value
Is it Right sir ?
Selling Price of Per Share is Rs. 1 Each,
then total Sale Price will
1,00,000 X Rs. 1 each = Rs: 1,00,000/-
Than Income Tax will @ 30% on Selling Value
Is it Right sir ?
04 December 2014
That is where I said I am getting confused with your terminology and vocabulary.
Why are you saying 1 lakh shares?
You mentioned 1 crore is the capital of INR 10 each share. So 10 lakh shares. Correct me if i am wrong.
And see, the FOREIGN COmpany is selling the shares, which is having a 100% subsidiary in India? Is that correct? That is what I understood from what you wrote in your query.
Why are you saying 1 lakh shares?
You mentioned 1 crore is the capital of INR 10 each share. So 10 lakh shares. Correct me if i am wrong.
And see, the FOREIGN COmpany is selling the shares, which is having a 100% subsidiary in India? Is that correct? That is what I understood from what you wrote in your query.
04 December 2014
Yes Sir,
Correct,(I was given a example of Shares.)
But what you have understood is Correct.
then What is Income Tax ? on both side
Seller as well as buyer.
Correct,(I was given a example of Shares.)
But what you have understood is Correct.
then What is Income Tax ? on both side
Seller as well as buyer.
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