India: Capital gains; startup initiative | KPMG | GLOBAL

India: Capital gains on buy-back of shares; startup initiative

India: Capital gains; startup initiative

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below):


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  • Capital gains from transfer of shares are taxable under India-Netherlands tax treaty: The Mumbai Bench of the Income-tax Appellate Tribunal held that capital gains arising to a foreign company on transfer of shares held in an Indian company, under a court-approved buy-back plan, is taxable under the India-Netherlands tax treaty. The tribunal found that the arrangement entered by the taxpayer in selling part of its shareholding to the company pursuant to the buy-back does not fall under the definition of “reorganization.” Still, the taxpayer was found to be entitled to a concessional rate of 10% on the capital gains. The case is: Accordis Beheer B V.
  • Action plan on “Startup India”: The Prime Minister of India launched a new initiative—“Startup India”—with a goal of nurturing innovation and start-ups in India. Read a January 2016 report [PDF 366 KB]

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