Tuesday, September 20, 2011

Capital gains earned by a Dutch company on transfer of shares held in an In

Capital gains earned by a Dutch company on transfer of shares held in an Indian company to a foreign company is taxable only in Netherlands

Income-tax : Capital gains earned by the applicant on transfer of shares would be covered by Article 13(5) of the Tax Treaty and shall be taxable only in the Netherlands, the State in which the transferor is a resident [Section 90 of the Income-tax Act, 1961 read with Article 13(5) of the India-Netherlands DTAA - Double Taxation Relief - Where agreement exists (Capital gains)]

l The applicant is required to file return of income under section 139 even if the capital gain is not taxable in India because instead of causing inconvenience to the applicant, the process of filing of return would facilitate the applicant in all future interactions with the Income-tax department - [2011] 10 taxmann.com 157 (AAR - New Delhi

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