Deductibility of Withholding tax

[anil kalia]

FACTS OF THE CASE : 1. A , B, C and D are NRI and have invested in the shares of a PVT Ltd company in India through transfer of funds from abroad. The company has allotted them shares and filled FC-GPR Form with RBI with in 30 days of the allotment of shares. The RBI has issued letter confirming having taken on record the investment of the NRI shareholders to be on repatriation basis. 2. Now A , B and C has sold there shares to D abroad and taken payament abroad. A has made profit of Rs.10 lacs in the deal, whereas B and C has sold shares at there cost. Please confirm whether D another NRI was liable to deduct withholding tax (TDS).

AI Summary

Foreign Investment in Indian Firm: Tax Implications for Share Transfer Among Non-Residents Under Advance Ruling A group of non-resident individuals, A, B, C, and D, invested in an Indian private limited company by transferring funds from abroad. The company complied with regulatory requirements by filing the FC-GPR Form with the Reserve Bank of India (RBI), which confirmed the investment on a repatriation basis. Later, A, B, and C sold their shares to D abroad, with A making a profit while B and C sold at cost. The query concerns whether D was required to deduct withholding tax (TDS) on these transactions. The response suggests consulting a specific ruling by the Authority for Advance Rulings for guidance.