Deemed Disposal as per Section 57

[Kailash]

April 19, 2020 at 12:02 pm

Section 57 of the Income Tax Act 2058 provides:

कुनै निकायको विगत तीन वर्ष अघिसम्मको स्वामित्वको तुलनामा पचास प्रतिशत वा सो भन्दा बढी स्वामित्व परिवर्तन भएमा सो निकायले आफ्नो स्वामित्वको सम्पत्ति वा आफूले वहन गरेको दायित्व निःसर्ग गरेको मानिनेछ ।

So, there is a company with 3 shareholders A, B and C and they own 30%, 45% and 25% of the shares respectively. Does section 57 apply in the following scenario in 2019?

1. Case 1: B sells his entire shares to E in 2018 and in 2019 E sells the entire shares to A.
2. Case 2: In addition case 1, C sells 10% out of 25% of his shares to A
3. Case 3: Instead of the scenario in case 2, C sells shares to Z.