Capital Gain
This query is : Resolved
16 February 2011
Can transfer of equity shares be considered as transfer of assets?
16 February 2011
Yes, Equity Shares are capital asset therefore transfer of equity shares will attract to capital gain.
Please Note that if you keep equity shares more than one year then there will not be any capital gain as it is exempt u/s 10(38), provided you have paid Securities Transaction Tax and shares should be trasnferred through recognized stock exchange.
Regards!!!
Dinesh S. Adhikari
Please Note that if you keep equity shares more than one year then there will not be any capital gain as it is exempt u/s 10(38), provided you have paid Securities Transaction Tax and shares should be trasnferred through recognized stock exchange.
Regards!!!
Dinesh S. Adhikari
Message likes :
2 times
17 February 2011
u haven't understood the question asked. In fact i wanted o ask that if a share holder of a company is selling his share of the equity shares and subsequently all the share holders are selling off their respective shares, can it be considered that the sale of shares was a way to dispose off or sell the business to some other entity and would it attract capital gain on transfer of assets of the company to some other person in this respect. Sorry for the wrong question conveyed to you..
22 March 2012
Mr. Ashish,
Sorry for delay, actual i today itself saw your question again.
As far as i understood that you are saying transfer of business to another entity through the transfer of shares. If i right understood the question then my answer is given below.
Firstly, Company is separate entity in the eyes of law,
Secondly, Their is transfer of only share but not of assets or company(no sell of business), means First company will run as it was running earlier.
Thirdly, Shares are Capital Assets as per IT Act'1961.
So, if their is no any other transfer other than shares then it will attract only capital gain tax in the hands of those shareholders who transferred their shares and will not attract any other capital tax.
Capital gain tax would be possible only then when there would be transfer of assets or sell of business, but both situtations are not exist there, therefore not any capital gain liability, except on shares.
regards
Dinesh
Sorry for delay, actual i today itself saw your question again.
As far as i understood that you are saying transfer of business to another entity through the transfer of shares. If i right understood the question then my answer is given below.
Firstly, Company is separate entity in the eyes of law,
Secondly, Their is transfer of only share but not of assets or company(no sell of business), means First company will run as it was running earlier.
Thirdly, Shares are Capital Assets as per IT Act'1961.
So, if their is no any other transfer other than shares then it will attract only capital gain tax in the hands of those shareholders who transferred their shares and will not attract any other capital tax.
Capital gain tax would be possible only then when there would be transfer of assets or sell of business, but both situtations are not exist there, therefore not any capital gain liability, except on shares.
regards
Dinesh
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- Tds on building rent monthly
- RCM INVOICING FROM NOV-2024
- Should I report my US salary for January, February, March in Schedule FA?
- GST ON EXPORT COMMISSION
- Confusion around Form 26QB fields
- Adjustment entry in the case of Individual and HUF on 31st March
- Stock difference tax applicable on composite rate or normal rate
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
