Did you know that startup investments (from non-Indians) got a tax fillip from the Budget 2016? If they sell shares in a private company, they will get taxed at only 10% of the gains in FY17, compared to the 20% they currently pay. From the Memorandum in the budget : Clarification regarding the definition of the term ‘unlisted securities’ for the purpose of Section 112 (1) (c) Existing provisions of clause (c) of sub-section (1) of section 112 provide tax rate of ten per cent for long-term capital gain arising from transfer of securities, whether listed or unlisted. The expression “securities” for the purpose of the said provision has the same meaning as in clause (h) of section 2 of the Securities Contracts (Regulations) Act, 1956 (32 of 1956)(‘SCRA’). A view has been taken by the courts that shares of a private company are not “securities”. With a view to clarify the position so far as taxability is concerned, it is proposed to amend the provisions of clause (c) of sub-section (1) of section 112 of the Income- tax Act, so as to provide that long-term capital gains arising from the transfer of a capital asset being shares of a company not being a company in which the public are substantially interested, shall be chargeable to tax at the rate of 10 per cent. … (Read On…)
[via Capital Mind]
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