Transfer of business from Holding company to its Wholly owned subsidiary

[Bhavani Prasad]

Dear Friends.,

One of the Pvt ltd co (Holding company) decides to transfer its Hydel project business to its Wholly owned Subsidairy (SPV).

• As we know whenever business is transferred to its 100% subsidiary there will be no attraction of capital gains (LTCG or STCG)    &

• Sec 293(1)(a) of Co's Act is not applicable as the same is not applicable to Pvt Ltd co's

In this scenario, I need to know what are the other legal implications/complications/hurdles involved in view of Legal,Income Tax and Secretarial point of view.

Learned members views are expected

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Regards

CS Bhavani Prasad C N
Company Secretary

[Suresh Balani]

Hi,

 

 

No capital gain tax in terms of Sec. 47(iv) of the income tax Act

 

Regards

 

Suresh Balani

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Regards
Suresh Balani

[Bhavani Prasad]

Hi Suresh

Thanks for your mail,any other implications as per Co's Act or legal point of view.

[Suresh Balani]

Hi,

 

Just ensure that the transaction takes place at market value as the "Domestic Transfer pricing law" is applicable from this year. And transaction between holding and subsideary company will comes under this net.

 

Further exemption from capital gain u/s 47(iv) will be eithdrawan in case subsideary transfer the business before the eight year from the date of transfer to him.

 

 

Regards

 

Suresh Balani