Capital Gain

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Pankaj Khodaskar (Querist)
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19 May 2008 Individual investors holding a US Co. US Co holding an India co. The shares of Indian co distributed by US co to its shareholders as dividends. Eventually, Individual investors hold shares in US co and India CO. I would like to know the capital gains implications on above transaction?
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Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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21 May 2008 Capital gain arises on transfer of capital asset.

In this case there was transfer of shares of Indian Co to its shareholders by US Co.Assuming the shares were not hold by it as stock in trade .......it was a transfr of capital asset by it.

But the transfer took place in US , where the transfer deed was executed (Assuming).

There is no capital gain tax in the hands of a Non resident in India on transfer of asset in US , because the gain did not arise in India.

Taxability of Divident in the hands of Indian investores is a different issue

T