closure of liasion office in india

 

Foreign company having liasioning office in india want to close it office in india..

following are queries:-

a)      capital gain on sale of fixed assets......
         i) what will be the cost of acquisition. ? is it WDV or Cost of acquisition

Replies (3)

Dear Sandeep Sir,

Yes Capital Gain will be computed (just confirm it with the relevant DTAA)

Second as to what would be deducted from Sale Price??

Answer will depend upon some facts from the past - 

"Whether Depreciation has been claimed on that Building under Indian Income Tax Act?" {I hope ur case is not covered under presumptive taxation}

If Yes then Sec 50 shall apply & WDV shallbe deducted

& if No then Sec 48 will apply & Cost  or Indexed Cost shall be deducted.

 

Originally posted by : Amir


 

 

1.  the liasion office is not allowed to earn any thing from india.. as such  no  

     depreciation is claimed by them. no income tax return has been filed by them

    also.

2.  do we have to take prior  permission from rbi for disposal of fixed assets.

 

 

 

Dear Sir,

U mean the Company was not carrying on any business from that laision office and hence not claimed any Depreciaton & it was an Investment i:e Capital asset -Yes then COA or Indexed Cost will be taken for the purposes of Capital Gain

Regarding approval From RBI - this link may help u

https://www.welcome-nri.com/info/project/aquistionfr.htm

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