Tax Implication on Share transfer

Hi,

I have one query:

CASE : ABC a pvt. ltd. company in India is a subsidiary company of foreign company XYZ. The members of Indian Pvt. company's are XYZ and its forign subsidiary MNO and another subsidary PQR. Now MNO is selling its share to XYZ at the same consideration with at par value of shares. The Company ABC is also a loss making entity since inception.

My query is 1) whether any tax liability on seller / purchaser

                     2) Is there any RBI approval required.

Thanking you in advance.

Regards,

Vijay  

Replies (2)

I would like to know the answr to this question tooo.. And i feel there would be no tax liability in this case.

Sir, 

Income from transfer of shares in Indian company is an income deemed to accrue or arise in India and would be subject to Indian Income Tax....

 

You might want to google the recent rulings of the ITAT & SC in Foster's case and Hutchison essar case... wonderfully-scheming people trying to avoid tax....

though your situtation does not appear to be complex like in those cases. I think your case will be covered U/s 9(i) of the Act and hence taxable

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