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Post Walmart-flipkart deal: I-T Post Walmart-flipkart deal: I-T

Post Walmart-flipkart deal: I-T seeks details of gains from Sachin, Binny Bansal

Nov 23, 2018

The Income Tax department has written to Flipkart founders Sachin and Binny Bansal and other shareholders seeking information related to their gains from the Walmart-flipkart deal. The department has also sought details about the payment of advance tax by them.

Both the Flipkart founders will be required to pay advance tax on the assessed income from the deal with US retail chain Walmart, out of which about 75 per cent has to be deposited by December 15 and rest by March 15 next year.

The communication is learnt to have been sent after scrutinisation of the Flipkart-Walmart deal and the withholding tax details shared by Walmart earlier in September.

“The tax department is looking through all details of the deal. While submission of withholding tax gave us an idea about the payments related to foreign investors , we need to see in detail the income with respect to domestic investors as per the tax laws,” an official said.

“Earlier, the international taxation wing had asked for details and now the assessing officer in Bengaluru has been communicating with them for more details,” the official added.

India levies long-term capital gains tax at the rate of 20 per cent for shares sold after 24 months of purchase.

In May, Walmart had announced $16 billion acquisition of 77 per cent stake in Flipkart. Non-resident shareholders in Flipkart who sold off their stake include SoftBank, eBay, Naspers. The tax department had in May communicated

to Walmart about the applicability of tax provisions of Section 9 (1) and Section 195 since both withholding tax and capital gains tax would apply on the deal.

Later, after the closure of the deal in August, Walmart has deposited about Rs 7,400 crore tax for buying out stake from shareholders in Flipkart.

Sachin Bansal and Binny Bansal did not respond to queries from The Indian Express.

Tax experts said the Indian stakeholders of Flipkart who have sold their shareholdings, being Indian residents, they would also be liable to pay income tax in India on capital gains arising from such transaction. Non-payment of advance tax will attract interest levy under section 234B and interest for short-payment of advance tax under section 234C the Act.

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