Transfer of Shares in Pvt co. by Non-resident

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Rajeswar (Querist)

10 November 2010 Dear members
A non-resident being a forein national wants to transfer the shares held by him in a PRivate limted company in India half to a Indian and other half to foreigner. Will the non- resident be subject to Capital Gains taX under the Income tax Act on such transfer. If so how should he pay the tax in India? Kinldy let me know the procedure.

thanks & regards

taxindiaconnect

taxindiaconnect (Expert)

10 November 2010 Answer to your two first queries is yes. The procedure is that the non resident has to compute his capital gain tax and tell the same to the resident purchase, who will deduct the TDS from the portion for which he is purchsing. The non resident purchaser also under obligation for deduction of TDS on his part and pay to the central govt. the non resident seller has to obtain PAN and file his return of income.

Rajeswar

Rajeswar (Querist)

16 November 2010 Thank u Sir. What rate of TDS should the resident deduct on such purchase? Kinldy let me know the relevant IT section.

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