Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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: ACCOUNTING STANDARD :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: articles on VAT and GST in India :: VAT Audit :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: cpt
 
 
« News Headlines »
  How to rectify income tax returns
 Govt extends tax exemption for industry in North East, hilly states
 Should you file revised Income Tax returns; find out here
 Tax Deducted at Source (TDS) in Goods & Services Tax (GST)
 10 companies that blamed GST for soft June quarter
 How will GST impact the Indian economy
 10 days left to file your first GST return. This is how you do it
 What is property tax and how is it calculated…
 File income tax returns in time to carry forward losses
 Missed the deadline to file income tax returns? Here is what you should do
 Who has to report foreign assets in Indian income tax return and how to do it

Capital gains tax on Hutch-like deals
April, 03rd 2007

The I-T department, which believes that Hutch-Vodafone deal falls under the capital gains tax ambit in India, may scrutinise similar transactions.

Transfer of beneficial interest of any asset in the country was liable to capital gains tax, a department source said. The source said Hutchison and Vodafone have sought approval from the Indian authorities, including Foreign Investment Promotion Board (FIPB), as the asset is in the country. The department thinks this would hold true for all transactions where the asset is located here, hence the move to examine such deals.

According to Section 911 of the Income-Tax Act, if any property located in the country is transferred, it would attract capital gains tax. The section does not provide for an exemption. However, sources familiar with the Hutch-Vodafone transaction denied the I-T departments claims. They point out that the transaction involves sale of Mauritius-based companies, which control a 67% interest in Hutch-Essar, the Indian entity. Thus, the provisions of the double-taxation treaty clearly hold.

Incidentally, when GE partially divested its stake in Genpact (then Gecis) to a clutch of private equity funds, it did not pay capital gains tax. The transaction too involved Mauritius-based entities. The I-T department recently shot off a letter to Hutchison Essar asking it to impress upon Hutch Telecom International to pay $1.9 billion by way of capital gains.

...it has come to our knowledge that HTIL has made substantial gains from their investment in Hutchison Essar. You are requested to impress upon HTIL to discharge their tax liabilities on the gains made.

Your attention is directed to Section 195 of the Income-Tax Act that casts an obligation on a person responsible for paying any sum which is chargeable to tax in India to a foreign company to deduct income tax at source at the time of payment credit. Thus, both the payer and the payee are required to discharge their obligations/liabilities as provided in the Income-Tax Act.

Your stand that you are not in a position to submit requisite details since you are not a party to the transaction is not correct since the shares of your company are being sold and you can provide the information from the parties concerned, it said.

Hutchison recently sold its majority holding in Hutch-Essar to Britains Vodafone in a deal valued at $18.8 billion. The capital gains tax is imposed at 20%. As the company is not listed, there would be no long-term capital gains tax exemption, in the I-T departments view.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 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