The income tax department has fixed September 7 deadline for Walmart to pay the withholding tax arising out of its deal with Flipkart, as per a report in Business Standard.
The US-based retail giant Walmart Inc and Indian e-commerce major Flipkart had announced acquisition in May, this year. Following this, on August 18, the former said it has completed the USD 16-billion deal to acquire a 77 percent stake in the latter after getting the approval from the Competition Commission of India (CCI).
As the deal announced to be closed, the I-T department has come to action and demanded to pay its due from the transaction.
According to the estimates examined by the publication, Walmart’s tax liability is around USD 2 billion, which is more than 10 percent of the transaction value. The assessment of the total liability will be done by I-T after the US retailer’s deposits the withholding tax.
Withholding tax is tax deducted at source (TDS) on interest or dividends paid to an entity residing outside the country. In the case of long-term capital gains tax, the withholding tax rate ranges between 10 to 20 percent, depending on the nature of investment. – Moneycontrol