Capital Gains

Tax planning 196 views 2 replies

Dear Sir,

I have a Company which has two buildings. The Company has only rental income and no other business transactions. They want to wind up the Company. The Company has two shareholders only. Each property goes to One shareholder on Winding Up.

Should the shareholders pay Capital Gains Tax or DDT upon receipt of the property?

Replies (2)
This is not a partnership where dissolution is easy.

Under Companies Act 2013 you have to follow the process of liquidation / winding up process as laid down.

You have to do independent valuation of assets and liabilities , give public notice of winding up etc etc and then distribution of assets amongst shareholders.

Taxes and DDT shall depend upon type and manner of winding up process.

STCG will be there to company as it's a depreciable block of assets.

Distribution between shareholders may not be called Dividend distribution and hence there won't be any DDT in my view.

There wont be any DDT upon receipt of the property
 


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