Capital Gains on Distribution of Assets by a Company in Liquidation
- No Capital Gains For Company
When a company distributes its assets to its shareholders upon liquidation, such distribution shall not be regarded as a “transfer” by the company for the purposes of Section 45. [Section 46(1)] - Capital Gains For Shareholders
When a shareholder receives money or other assetsfrom a company on its liquidation, he shall be chargeable to income-tax under the head “Capital Gains”. - The Full value of consideration
The net amount below shall be deemed to be the full value of consideration for the purposes of Section 48.
[Money received + Market value of assets received on the date of distribution] − [Amount assessed as dividend under Section 2(22)(c)]