23 August 2018
A singapore based company (NR Company) holding some shares of an Indian company. Now it is selling these shares which are being bought by a seperate Indian company. Is there any liability of deducting TDS from the consideration paid for these shares? It is requested to the expert members to kindly give their suggestions / advice in the limelight of DTAA between India - Singapore. Article 13 of the treaty is reproduced for your kind perusal :
Article 13
CAPITAL GAINS
1. Gains derived by a resident of a Contracting State from the alienation of immovable property, referred to in Article 6, and situated in the other Contracting State may be taxed in that other State.
2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other State.
3. Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident.
4. Gains from the alienation of shares of the capital stock of a company the property of which consists principally, directly or indirectly, of immovable property situated in a Contracting State may be taxed in that State.
5. Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State.
6. Gains from the alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4 and 5 of this Article and paragraph 3(b) of Article 12 shall be taxable only in the Contracting State of which the alienator is a resident.
IT IS REQUESTED TO RESPECTED MEMBERS TO KINDLY ADVISE REGARDING THE MATTER AS IT IS URGENT
23 August 2018
Yes liability is there of deducting TDS from the consideration paid for these shares. Short term capital gains 15%. 20% on line term capital gains after deducting indexed cost of acquisitions.
CAclubindia
