Where a foreign company holds some shares in an Indian company and transfers the same, in case of a demerger, to another resulting foreign company, such transaction will be regarded as transfer for the purpose of capital

Section 47(vic) of the Income Tax Act, 1961 deals with Tax concession to a foreign demerged company. It provides that: Where a foreign company holds any shares in an Indian company and transfers the same, in case of a demerger, to another resulting foreign company, such transaction will not be regarded as transfer for the purpose of capital gain under section 45 of the Act if the following conditions are satisfied: the shareholders holding not less than three-fourths in value of the shares of the demerged foreign company continue to remain shareholders of the resulting foreign company; and such transfer does not attract tax on capital gains in the country, in which the demerged foreign company is incorporated: Sections 230 to 232 of Companies Act, 2013) shall not apply in case of demergers referred to in this clause.