« Top Headlines » Open DEMAT Account in 24 hrs  Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)  Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose  Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More  Government proposes to ease tax relief conditions for offshore funds  TallyPrime Connected Banking: Automating Banking and Accounting  ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update  ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide  Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers  Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It  ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes  Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs «  Taxmen demand better deal... More private sector cos enter top advance tax payers list... » 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.