AAR: CAPITAL GAINS FROM TRANSFER OF SHARES HELD BY MAURITIAN COMPANY NOT TAXABLE IN INDIA
The Authority for Advance Rulings (AAR), a quasi-judicial panel, has ruled that capital gains arising from transfer of shares held by a Mauritian company in an Indian firm are not taxable in India.
The ruling, in response to a plea by DB Zwirn Mauritius to ascertain its tax ability on transfer of equity shares of Quippo Telecom Infrastructure, will come as a major relief to UK-based Vodafone which has sought the authority's opinion in a transaction of similar nature. Vodafone has sought AAR's opinion on if the company was required to deduct tax on payment made to Essar
for the 22% stake held by the Indian company through a Mauritius- based entity.
The ruling, in response to a plea by DB Zwirn Mauritius to ascertain its tax ability on transfer of equity shares of Quippo Telecom Infrastructure, will come as a major relief to UK-based Vodafone which has sought the authority's opinion in a transaction of similar nature. Vodafone has sought AAR's opinion on if the company was required to deduct tax on payment made to Essar
for the 22% stake held by the Indian company through a Mauritius- based entity.
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