If immovable property is situated in India, gains also taxable in India

Accommodation Times Bureau

The first question relates to taxability of amount received on release and relinquishment of tenancy rights, whereas, the second question relates to capital gains on sale of 596 shares and as such do not involve determination of fair market value. As regards the amount received on release of tenancy rights, the tenancy rights are in respect of real estate and would be gains derived from alienation of immovable property. As the immovable property is situated in India, the gains are taxable in India under Article 13.1 of the DTAA. As regard the gains derived from the sale of 596 shares of Parikh Agencies Pvt. Ltd., being other than shares quoted on approved stock exchange, since the value of the shares is derived principally from immovable property situated in India, the same are taxable under Article 13.4 of the DTAA in India.

AUTHORITY FOR ADVANCE RULINGS (INCOME TAX)

NEW DELHI

22nd Day of March, 2012





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