Query: income tax on transfer of business of pvt ltd

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2014 Dear All,

I have a Query regarding sale of business of Pvt ltd, where all the shares of the promoters will be transferred.

What will be Income tax Treatment and calculations?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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06 December 2014 1. Capital gain will arise in the hands of the promoters on transfer of shares.

2. If the period of holding is 12 months or more, then Long Term Capital Gain (LTCG) will arise.

3. If the period of holding is less than 12 months then short term capital gain (STCG) will arise.

4. In case of LTCG indexation benefit is available.

5. LTCG is taxable @ 20% and STCG is taxable at normal slab rates.