1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Tax on sale of website in india?

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

  1. billgates

    billgates Registered Member

    Joined:
    Nov 30, 2009
    Messages:
    82
    Likes Received:
    8
    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

    Joined:
    Sep 24, 2008
    Messages:
    3,816
    Likes Received:
    13,935
    Is that $25k or $250k? From what you have described, it should be worth a lot more than $25k...
     
  3. billgates

    billgates Registered Member

    Joined:
    Nov 30, 2009
    Messages:
    82
    Likes Received:
    8
    Hey buddy, it's 250k $ :)
     
  4. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

    Joined:
    Sep 24, 2008
    Messages:
    3,816
    Likes Received:
    13,935
    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

    Joined:
    Apr 25, 2013
    Messages:
    1,028
    Likes Received:
    133
    Home Page:
    give me some...:p
     
    • Thanks Thanks x 1
  6. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

    Joined:
    Jun 20, 2013
    Messages:
    3,716
    Likes Received:
    2,110
    Location:
    Buy Website
    Home Page:
    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

    Joined:
    Jul 23, 2009
    Messages:
    5,048
    Likes Received:
    3,684
    Occupation:
    Just Another Digital Marketer!
    Location:
    "Insta Rank"
    Home Page:
    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

    Joined:
    Sep 6, 2011
    Messages:
    1,250
    Likes Received:
    1,045
    Occupation:
    Digital Marketer
    Location:
    Bangkok, Thailand
    Consult a CA for this. They might help you in a better way
     
  9. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

    Joined:
    Jun 20, 2013
    Messages:
    3,716
    Likes Received:
    2,110
    Location:
    Buy Website
    Home Page:
    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

    Joined:
    Nov 30, 2009
    Messages:
    82
    Likes Received:
    8
    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 Regular Member

    Joined:
    Jul 28, 2012
    Messages:
    377
    Likes Received:
    172
    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

    Joined:
    Nov 30, 2009
    Messages:
    82
    Likes Received:
    8
    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

    Joined:
    Jul 15, 2012
    Messages:
    2,682
    Likes Received:
    1,203
    Gender:
    Male
    Location:
    in front of imac
    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 Regular Member

    Joined:
    Jul 28, 2012
    Messages:
    377
    Likes Received:
    172
    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.