Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: VAT RATES :: ACCOUNTING STANDARDS :: form 3cd :: VAT Audit :: cpt :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT
News Headlines »
 What if you forget to verify your Income Tax return?
 TDS on rent and other tax tasks to complete before March 31
 5 income tax changes which will come into effect from April 1, 2018
 Why you shouldn't be a last-minute tax filer
 How to calculate income tax for this assessment year on Moneycontrol
 6 Tax notices you may get and how to cope with them Income Tax Notice
 Deadline to pay advance tax ends tomorrow: Here is a step-by-step guide
  Central Goods and Services Tax (Second Amendment) Rules, 2018
 Income Tax Return Filing Deadline: Waiver On LTCG Tax To End On 31 March. Details Here
 Income tax returns (ITR) filing: Top mistakes that can be very costly
 Income Tax Return (ITR) filing: 6 last-minute things you can still do to save tax for FY17-18

Satyam open offer to attract capital gains tax
March, 09th 2009

Domestic shareholders who sell shares of Satyam Computer Services in the open offer made by a strategic investor will have to pay tax on capital gains.

Tax will be charged, irrespective of the period of holding the shares, since an open offer is an off-market transaction. In an open offer, the acquirer makes a public announcement , disclosing his intention to acquire shares of a target company from existing shareholders. The disclosure comprises the offer price, the number of shares to be acquired , the identity of the acquirer and the purpose of acquisition.

Going by the norms cleared by Sebi last week, the strategic investor in Satyam will have to make a mandatory open offer of at least 20% of the shares, after acquiring up to 31% through a preferential allotment . The open offer will have to be made at the same share price as the price paid by the acquirer in the preferential allotment (while subscribing to newly-issued equity shares).

Capital gains will accrue to a shareholder of Satyam if the openoffer price is higher than the cost of acquisition of shares. Domestic shareholders will be charged a 30% tax on short-term capital gains, if any. Short-term capital gains arise if shares are sold within a year of holding them. The tax liability will, however , be lower on long-term capital gains that accrue when shares are sold after a year of holding them. The rate is 20% with indexation benefits, or 10% without indexation benefits.

Domestic investors who bought shares after January this year could make capital gains while those who invested during the bull-run may book a capital loss if they tender their shares in the open offer. Mauritiusbased FIIs will be exempt from capital gains tax by virtue of Indias tax treaty with the island nation.

The Satyam board will have to approach the Central Board of Direct Taxes (CBDT), if at all there is a case for a capital gains tax waiver to domestic shareholders. Considering the fact that the Company Law Board (CLB) and Sebi have granted certain exemptions to potential bidders that could be detrimental to minority shareholders, it would be interesting to see if CBDT grants exemption from capital gains to shareholders participating in the open offer, said Nishchal Joshipura, head-M&A , Nishith Desai Associates.

In the normal course, investors who sell Satyam shares, or the shares of any other listed company, through the stock exchange and make profits on the sale, enjoy a beneficial tax treatment. They are exempted from paying long-term capital gains tax. Else, they have to pay a 15% short-term capital gains tax. The beneficial tax regime is linked to the payment of STT that is charged on transactions routed through the stock exchange.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

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