URGENT-Tax liability

Shweta Bansal (CA) (175 Points)

21 February 2011  


Fact of the case:

Two Indian residents formed a company in British Virgin Island (BVI Co). This company owns a property in United Kingdom.



  1. What will be the tax implications on the BVI Co if it sells property held in UK (Refer DTAA b/w UK & Virgin Island)?
  2. What will be the treatment of the rental income earned from the property? Also can it be set off against the interest paid on loan taken to acquire property.
  3. What will be the tax treatment in the hands of resident Indians if the company BVI Co is sold?