CAF-2 · Chapter 9 · Question 9 of 15
Mr. A acquired shares in a private (unlisted) company. Under Section 37(6), what is his obligation regarding withholding tax at the time of paying the seller or registering the shares?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) A) He must deduct advance adjustable tax at the rate of 10% of the fair market value of the shares.
Explanation
The person acquiring a capital asset, being shares of a company (other than listed company shares settled through NCCPL), shall deduct advance adjustable tax at the rate of 10% of the fair market value of the shares at the time of payment or registration, whichever is earlier.
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