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Bhatnagar Gurupyara   06 November 2021

Status of transfer deed between parent comp and subsidiar co

is the transfer deed between parent company and subsidiary company is considered as sale to a third party or not?


 2 Replies

Anusha Singh   07 November 2021

As per your query it is understood that you need information regarding transfer of assets between parent company and subsidiary company.

It will be considered to be a transfer between group companies and no third-party rights are created. Moreover, such a transfer of asset is also not liable to tax as per section 47 of IT Act. However, this is subject to fulfillment of following conditions.

Section 45 of the Income Tax Act, 1961 (IT Act) taxes any profits or gains arising from transfer of a capital asset under the head "Capital Gains". However, section 47 of the IT Act lists down certain transactions which shall not be regarded as transfer for the purpose of section 45 of the IT Act and thereby not liable to tax. One of the specified transactions is transfer of capital asset by a subsidiary company to its holding company subject to fulfilment of following conditions:

1.    the whole of the share capital of the subsidiary company is held by the holding company; and

2.    the holding company is Indian Company

Hope it helps!



Anusha Singh

P. Venu (Advocate)     10 November 2021

You have not posted the material facts.

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