Capital gain on transfer of share

This discussion clarifies capital gains tax implications when a US parent company sells a 20% stake in its US subsidiary to another US company. The transfer is primarily taxable under US law. While the initial thought considered Indian taxation due to the subsidiary, the transaction's location between two US entities means US tax regulations apply. Any funds entering India from these transactions would be assessed according to the Double Taxation Avoidance Agreement (DTAA) between the US and India.