Tag Archives: listed companies

ILN Today Post

Transfer of Shares (of a Listed Company) between Non-Residents Exempt from Capital Gains Tax

The Delhi High Court (“DHC”), has in a recent judgment (delivered on February 27, 2013) affirmed the ruling of the Authority for Advance Rulings (“AAR”), delivered on May 2, 2011, stating that income arising out of transfer of a long term capital asset, such capital asset being equity shares of an Indian listed company (where the transaction of sale of such equity shares is chargeable to securities transaction tax), would be exempt from payment of tax in India.

The issue concerning taxation arose when Goodyear Tire and Rubber Company (“GTRC”), a company incorporated under the laws of USA, transferred seventy four (74%) shares of Goodyear India Limited (“GIL”), a public company in India listed on the Bombay Stock Exchange (“BSE”), to its Singapore subsidiary, Goodyear Orient Company (Private) Limited (“GOCPL”) under a share contribution deed without any monetary consideration.

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