TaxTMI 
TaxTMI 
x ltd is holding 99% shares of y pvt ltd, and y pvt ltd is having share capital 10 lacs and share premium 190 lacs and 200 lacs in bank.whether on merger of two companies, whether share premium will be taxable under IT Act,1961
merger of companiies
01 Jul 2010 
1 Reply 
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Share premium taxability: clarify origin of premium; premium on issue of shares is unlikely taxable on merger.
Query whether share premium credited on issue of shares will be taxable on merger when the parent holds the majority stake; respondent asks for factual clarification on the nature and origin of the premium and indicates that premium received on issue of shares is unlikely to be taxable, requesting further details to determine tax characterisation in the merger context. (AI Summary)
Query whether share premium credited on issue of shares will be taxable on merger when the parent holds the majority stake; respondent asks for factual clarification on the nature and origin of the premium and indicates that premium received on issue of shares is unlikely to be taxable, requesting further details to determine tax characterisation in the merger context. (AI Summary)