Regarding Capital Gains Tax on tranfer of shares by foreign co.

What will be the Taxability in hands of each of the companies where an indian co.(Say A) purchase shares of another indian company(called B) from a USA based company(called C).

Capital Gains in the hand of Company C will be chargeable at the rate as the case may be depending upon whether STCG is earned or LTCG. [Refer explanation 5 to section 9(1)]
Company A will be liable to deduct tax u/s 195 on remittance to Company C at the rate of 20%. [Refer explanation 2 to section 195(1)]
There will be no tax liability on Company B.


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