Hello all
I have a client who had issued prefrence shares of Rs. 10/- each (Rs. 5/- each called up), now the shareholder is not able to pay the call money of Rs. 5/- and the company wants to forfeit the entire share capital issued to that shareholder.
My query is what will be the tax treatment of forfeited amount in the hands of the company and in the hands of shareholder and whether there is any implication under MAT of the forfeited amount in hands of company.
Please reply, its urgent.
good eveninig
my opinion is tax impact will mot attract now,unless the company has reissued shares and any surplus left after reissue(excess in shares forfeited a/c after reissue)
pls if u got answer to ur question send me pm
Please see if this can help:
Forfeiture of share warrants for non-payment of balance amount leads to 'capital loss' - It is a capital asset giving a right to the share on full payment which is extinguished on forfeiture - (198 taxman 205) (Mag.) - Shri Chand Ratan Bagri (Del)(HC)
Nice question,
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