Exemption from the Levy Of Capital Gains Tax to facilitate Conversion Of Sole Proprietary Concern Into A Company in case of NRI
[Capital Gain of an NRI could be Completely Exempt from Income Tax]
Likewise, when a sole proprietary concern is succeeded by a company in business carried on by it as a result of which the sole proprietary concem sells or otherwise transfers any capital asset or intangible assets to the company, the entire amount of capital gains would be fully exempt from tax under Section 47(xiv) from the A.Y. 1999-2000. However, the following conditions are to be fulfilled:
All the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession become the assets and liabilities of the company;
The shareholding of the sole proprietor in the company is not less than 50% of the total voting power in the company and his shareholding continues to so remain as such for a period of five years from the date of the succession; and,
The sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner other than by way of allotment of shares in the company.
Capital Gain of an NRI could be Completely Exempt from Income Tax
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications