Surplus at the time of Winding UP

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This query is : Resolved

CS Sandip Rahane (Querist)

08 September 2009 Hello Dear Friends,

We are purchasing one company (RAj Pvt ltd) by aquiring his all shares and after that we will sale it to third party.
After this transaction the company will make profit and i think that same will be taxable under CG tax.

We also winding up that means our (Sunraj
pvt. ltd) company by paying the all third pary liabilities and return of paid up.
After the paying above there will remain surplus amt with company so

wht shall i do of that surplus?
Can i distri it to shrehold as dividend ?
if yes wht is the tax procedure and rate of the same.

Plz reply
waiting.....
CS Sandip Rahane

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

09 September 2009 SECTION 46 READS AS UNDER

Capital gains on distribution of assets by companies in liquidation.

46. (1) Notwithstanding anything contained in section 45, where the assets of a company are distributed to its shareholders on its liquidation, such distribution shall not be regarded as a transfer by the company for the purposes of section 45.

(2) Where a shareholder on the liquidation of a company receives any money or other assets from the company, he shall be chargeable to income-tax under the head â€œCapital gainsâ€, in respect of the money so received or the market value of the other assets on the date of distribution, as reduced by the amount assessed as dividend within the meaning of sub-clause (c) of clause (22) of section 2 and the sum so arrived at shall be deemed to be the full value of the consideration for the purposes of section 48.

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