30 March 2011
I understand that in India Long term capital gain tax on transfer of shares in Exempt while on STCG we have 15%/10% tax. Now, my question is: in case any promoter sells off his stake after holding it for more than one year, does he liable for any tax. This is with reference to - In case of Vodafone Hutchison deal, I understand matter is whether Indian tax authorities have jurisdication over the deal but I want to know if Hutchison held the shares for more than one year and subsequently sold off. They are not liable for any LTCG. How is then $2bn tax on $11b deal arrived at.
31 March 2011
Here you are missing the point ,LTCG is taxfree only when the transaction has been done through recognized stock exchange and STT has been paid on that . That did not happen in Vodafone deal as the Hutch was not a listed Company in India.
Vodafone purchased the Single share of the Holding Company of Hutch outside India and claimed that there is no tax liability on the same as no Indian Shares were transferred.
This is a Landmark case and let us wait till the matter is finally decided by Supreme Court.
CAclubindia
