McGill USA, a prominent international entity, sought expert advice on the Indian tax implications of transferring shares of an Indian company from one non-resident to another. Majmudar & Partners provided comprehensive guidance to ensure compliance with Indian tax laws and optimized the transaction structure.

Facilitating the Transaction

Majmudar & Partners played a pivotal role in this transaction by:

• Analyzing Tax Implications: Assessed the capital gains tax liabilities arising from the share transfer between non-residents, ensuring alignment with the Income Tax Act, 1961.
• Valuation Compliance: Advised on the fair market value determination of the shares, adhering to Rule 11UA of the Income Tax Rules, 1962, to ensure accurate tax computation.
• Withholding Tax Advisory: Clarified the applicability of tax withholding requirements under Section 195 of the Income Tax Act, confirming that no tax deduction at source was necessary for the transaction.
• Exploring Gift Taxation: Evaluated the feasibility of structuring the transfer as a gift, considering provisions under Section 56(2)(x) of the Income Tax Act, and advised on potential tax exemptions and implications.

Majmudar & Partners’ meticulous analysis and strategic advice enabled McGill USA to navigate the complexities of Indian tax regulations, ensuring a compliant and tax-efficient share transfer.

Majmudar & Partners specializes in providing tailored tax advisory services for cross-border transactions involving Indian entities. Contact us today to ensure your international dealings are both compliant and optimized for tax efficiency.