Q. Taxability on transfer of shares by NR to NR

Question

Q.A company named XYZ Ltd registered in India and X being a non resident is one director as well as shareholder of XYZ ltd . Mr. X want to sale its shares to Mr P who is also non resident  at face value of shares rather than fair value. Can he do so ? What is tax implication if he do so at fair value as well as face value

Answer 1

Section 9(1)(i), Expl. 5,6 and 7 will be applicable.
If the sale is on face value and the FMV is higher than FV, 56(2)(x) will apply in the hands of receiver.
There are certain compliance also which the india company has to take care.