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AMALGAMATION

During amalgamation, C.A transferred from amalgamating co. to amalgamated co. is not treated as transfer(S.47(vi)) Shares of old co. taken back by amalgamating co. is also not treated as transfer(S.47(vii)) What about new shares given to SHs? What is the tax treatment if consideration for taking back old shares were not new shares of the co.?


Salman Faris

Salman Faris

CA Inter

61K+

15-Feb-21 18:02

19

Answers (3)

New share are freshly issued - so its not a transfer. If say cash is paid, then it would be transfer.


Suraj Lakhotia

Suraj Lakhotia

Admin

16-Feb-21 10:48

Sir I don't understand it. U tells that issue of shares are not accounted as transfers u/s 2(47) And Money received against is accounted as transfer(I don't understand) u/s 2(47) .......IS IT SO.....??? If so when shares are issued and money received by co.., will they pay tax on it


Salman Faris

Salman Faris

CA Inter

61K+

18-Feb-21 17:14

Sir I don't understand it. U tells that issue of shares are not accounted as transfers u/s 2(47) And Money received against is accounted as transfer(I don't understand) u/s 2(47) .......IS IT SO.....??? If so when shares are issued and money received by co.., will they pay tax on it

My response was on specific to amalgamation. If new shares are issued to shareholders - not a transfer If cash is paid to acquire shares from shareholders - transfer. In case of new issue, there is no taxability other than those provided in Section 56.


Suraj Lakhotia

Suraj Lakhotia

Admin

19-Feb-21 08:36

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