Capital-gains planning on exit and divestment for foreign investors in India.
When a foreign investor exits an Indian investment, the gain on the sale of Indian shares or securities is generally taxable in India, with the rate depending on the holding period, the nature of the instrument and the availability of relief under the capital-gains article of the applicable treaty. Indirect transfers - the sale of a foreign holding company that derives its value substantially from Indian assets - can also be taxed in India.
A clean, efficient exit depends on decisions taken at entry: the holding jurisdiction, the instrument used and the treaty position. AMLEGALS advises foreign investors on the capital-gains treatment of their exit, the treaty relief available, the indirect-transfer rules and the withholding and reporting on the transaction, and structures the entry so the eventual exit is as efficient and certain as the law allows.
Computing the capital gain and the applicable rate by holding period and instrument.
Assessing relief under the capital-gains article of the applicable treaty and the conditions for it.
Testing whether the indirect-transfer rules apply to an offshore sale of the holding entity.
Managing buyer withholding, lower-deduction certificates and the transaction reporting.
Structuring the entry holding and instruments so the exit is tax-efficient and certain.
Preparing the tax clearances, certificates and FEMA documentation for repatriation of proceeds.
Generally yes. The gain is taxable in India, with the rate depending on the holding period and the instrument, subject to any relief under the capital-gains article of the applicable treaty. AMLEGALS computes the gain and applies the treaty position.
They tax, in India, gains on the transfer of a foreign entity that derives its value substantially from Indian assets, subject to prescribed thresholds and exemptions. An offshore share sale can therefore have an Indian tax consequence, which AMLEGALS assesses before the deal.
By choosing the holding jurisdiction, instrument and treaty position at entry with the exit in mind, and by documenting substance and beneficial ownership. AMLEGALS aligns the entry structure with the intended exit so relief is available and defensible.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing. An initial discussion is confidential and is used only to understand the matter and assess fit.
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