Share Application Money
This query is : Resolved
27 December 2010
Whether an Indian Company is liable for Capital Gains Tax or Income Tax on Share Application Money received @ 500% premium from a Cayman Island based Company and Whether the liability can be deferred?
Company has never been in profit and always shows losses since inception.
Company has never been in profit and always shows losses since inception.
27 December 2010
not liable for income tax providd proper justification of premium has to be given. no matter co is presently is in loss if co is having good orders and expecting good earnings then premium can be charged
28 December 2010
I will like to clarify that under FEMA regulations you have to justify such huge premium. Under the FEMA you have to give a CA certificate based on Discounted Cash Flow method to RBI at the time of allotment of shares.
Also you shall need to inform RBI within 30 days of receipt of such share application money .
Also you will need to issue share capital against such shares application money within 6 months of receipt of such payment.And as told earlier you need to inform RBI along with CA certificate for the valuation of shares.
Also you shall need to inform RBI within 30 days of receipt of such share application money .
Also you will need to issue share capital against such shares application money within 6 months of receipt of such payment.And as told earlier you need to inform RBI along with CA certificate for the valuation of shares.
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28 December 2010
Thank you Sir. This is really helpful.
29 December 2010
No capital gains tax on allotment of shares by a company. However, reporting needs to be done in Form FC-GPR.
Regards
Jatin
jatingupta@vgglobal.co.in
Regards
Jatin
jatingupta@vgglobal.co.in
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