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Tax on sale of website in india?

Discussion in 'Business & Tax Advice' started by billgates, Apr 9, 2014.

  1. billgates

    billgates Registered Member

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    Hi,

    I own a huge social networking website which makes about 3 - 4k $ pm, has over 500k members and generates a million pageviews pm.

    I've recently got an offer of 2,50,000 $ for it and I am exploring accepting it. I wanted to know how does one deal with the tax situation? The website is a registered company in india.
     
  2. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Is that $25k or $250k? From what you have described, it should be worth a lot more than $25k...
     
  3. billgates

    billgates Registered Member

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    Hey buddy, it's 250k $ :)
     
  4. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    That's a good offer. Not sure I can help with Indian taxes but let me know if you have any questions about keeping yourself safe in the deal :)
     
  5. pulkitseo

    pulkitseo Senior Member

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    give me some...:p
     
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  6. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    You need to pay capital gain tax on website selling. Consult C.A before selling site (For saving Capital gain tax).
     
  7. howard_hughes

    howard_hughes Elite Member

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    It'd best to talk to a good CA, who knows about internet earnings

    Income tax, you need to pay that but it can be as low as 8% if you can Show Expenses.

    if u accept over 10L ruppees (Gross not Net) then u need file 10% service tax too. There's a way to get around it by saying the earnings are from Sale of Advertizing space on internet, which is exempt of S.Tax as Per section 66 D
     
  8. hardcorebiker

    hardcorebiker Jr. VIP Jr. VIP

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    Consult a CA for this. They might help you in a better way
     
  9. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    There is no service tax on any internet earning unless you sell things and provide services with in India.If you are providing IM services outside India then there is no service tax.
     
  10. billgates

    billgates Registered Member

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    Thanks guys. My wife is a ca and her family business is of CA consulting but even they are having a hard time with this. Things on the internet are different and since its a usa buyer who will escrow the money.. my options seem limited

    Thats why wanted to hear from members here about work arounds
     
  11. warner410

    warner410 Jr. VIP Jr. VIP

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    Sell the whole company.

    Show it as a transfer of capital asset and pay capital gains tax.

    What's the confusion about?
     
  12. billgates

    billgates Registered Member

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    It's a private limited company and I have been claiming expenses of employees in the balance sheet.

    In that case, how do I show capital gain ? What's the interpretation ? Apart from that, for capital gain ... we need to have a base cost to the asset. How do we interpret that?
     
  13. back2form

    back2form Jr. VIP Jr. VIP Premium Member

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    So, You're gonna bank $2,50,000 for a single domain & hesitating to pay some $$$ for TAX :)

    Congrats! There is another billgates in India :) lol
     
  14. warner410

    warner410 Jr. VIP Jr. VIP

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    I am not a qualified accountant but I think the price at which the company issued shares to you is your cost.

    Your company is making $3k-$4k per month. That means you must be getting your accounts audited. Why not ask your auditor about it?

    If you just want to save tax, you can invest in 54 EC bonds.