TAX COMPLIANCE OF MERGER BY PRODCER COMPANY
This query is : Resolved
15 March 2008
Dear Sir,
One of my Client , wholly ownred State Government company procedding to merger with other two wholly ownred State Government company .In such case , what are the tax liability for the transferor company ?
One of my Client , wholly ownred State Government company procedding to merger with other two wholly ownred State Government company .In such case , what are the tax liability for the transferor company ?
15 March 2008
whatever the assets are transferred are not liable to capital gain tax bu virtue of sec.47
15 March 2008
NOT A TRANSFER AS PER SECTION 47
15 March 2008
FROM 1999-2000,MERGERS ARE TAKEN OUT OF THE PURVIEW OF TRANSFER UNDER SEC 47.
SO THERE ARE NO CAPITAL GAINS OR OTHER LIABILITIES.
BUT ON THE VALUE OF SHARES ALLOTTED BY THE RESULTING COMPANY TO TRANSFEROR COMPANY CONSEQUENT TO THE MERGER , STAMP DUTY OF 2.5% IS PAYABLE WEF THE YEAR 2005 AUGUST. BUT WHETHER A GOVT. COMPANY GETS EXEMPTION OF STAMP DUTY BEING A STATE DUTY ? ONE CAN APPLY TO GOVT. AND TRY FOR EXEMPTION FROM STAMP DUTY.
R.V.RAO
SO THERE ARE NO CAPITAL GAINS OR OTHER LIABILITIES.
BUT ON THE VALUE OF SHARES ALLOTTED BY THE RESULTING COMPANY TO TRANSFEROR COMPANY CONSEQUENT TO THE MERGER , STAMP DUTY OF 2.5% IS PAYABLE WEF THE YEAR 2005 AUGUST. BUT WHETHER A GOVT. COMPANY GETS EXEMPTION OF STAMP DUTY BEING A STATE DUTY ? ONE CAN APPLY TO GOVT. AND TRY FOR EXEMPTION FROM STAMP DUTY.
R.V.RAO
17 March 2008
Thank you very much sir for clarification given by you.
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