Daiichi Sankyo's buyout of Ranbaxy for over Rs 10,000-crore is under the scanner of taxmen to ascertain whether the Indian promoters could be asked to pay the long-term capital gains tax of more than Rs 1,000 crore.
"The companies have so far announced the deal and the actual transaction is yet to take place. If the deal is outside the stock exchange then capital gains tax would apply," said a senior official in the Income-Tax department.
If the deal is outside the exchange, the Indian promoters would be liable to pay 10 per cent long-term capital gains tax along with surcharge and 3 per cent education cess, he added.
However, if the deal is through the stock exchanges, then Ranbaxy promoters may not be liable to pay any capital gains tax. In that case, the securities transactions tax (STT) and service tax on it would be payable, the official said.
Commenting on the possible tax liability of this unprecedented buyout, Mr Richard Rekhy, COO, Global Tax consultant and KPMG said, "I do not think the market regulator SEBI would have any problem to allow the transaction of shares through stock exchange. In that case, the promoters could avoid paying the tax on long-term capital gains that are non-taxable in India."
A tax expert of the taxation committee of industry body Assocham also said, "Though the transaction will not attract a capital gain tax but the benefits arising out of the transaction or the capital created out of the transaction will be deemed as an inc ome and will attract income tax as per the I-T laws of the country." - PTI