Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: cpt :: Central Excise rule to resale the machines to a new company :: VAT RATES :: due date for vat payment :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: VAT Audit :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: articles on VAT and GST in India
« News Headlines »
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016

MNCs get tax breather on asset sale
October, 05th 2007
Foreign companies selling assets in India could end up enjoying a concessional rate of capital gains tax of 10% even if these companies enjoy the foreign currency fluctuation benefit.

This follows the ruling by the Authority for Advance Rulings (AAR) in the Timken (France) case, where it has held that foreign companies will be eligible for concessional tax rate of 10% on capital gains made on any asset purchased in foreign currency.

Normally, companies have to pay a capital gains tax of 20% if they opt for the forex cover, which protects them from the volatility of the currency.

Timken SAS of France which sold off its shares, including bonus shares, in NRB, a listed company in the Indian bourses, had sought the AARs ruling on the capital gains tax rate. The transaction was an off-market one. Though the AAR ruling will be binding only in the case of Timken, it has advisory value. The judgement could be cited as an example by any assessee in future.

Computation of capital gains is laid out under Section 48 of the Income Tax Act. This section details various provisions like indexation benefit and foreign currency fluctuation benefit that are taken into account while computing the capital gains tax liability for a company.

Typically, the capital gains tax differs between 10% and 20%, depending on the options availed. For instance, a company is liable to pay capital gains tax at a rate of 20% if it avails the indexation benefit. Indexation is the process by which the cost of acquisition of capital asset is marked to represent the cost levels existing in the year the capital asset is sold. Cost normally keeps increasing from year-to-year because of inflation. Every year, the finance ministry notifies the Cost Inflation Index for that year, which is used in calculating indexation.

A company is exempted from long-term capital gains tax if the transaction was liable for the securities transaction tax. But in this case, since the transaction was off-market and no STT was paid, it was liable for a long-term capital gains tax.
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions