I-T Dept to Assess Tiger Global's Flipkart-Walmart Deal Capital Gains Tax

• The Income Tax department will now proceed with the capital gains tax assessment for Tiger Global's 2018 exit from Flipkart, selling its stake to Walmart for Rs 14,500 crore.
• The assessment was on hold pending legal resolution, with the Supreme Court recently ruling in favor of the Indian tax department.
• Tiger Global's Mauritius entities had claimed non-taxability based on pre-April 2017 investments and Tax Residency Certificates (TRCs) under the India-Mauritius tax treaty.
• The I-T department argued that Tiger Global's Mauritius entities were interposed, lacking commercial substance, and the arrangement was for treaty shopping.
• The Supreme Court reversed the Delhi High Court's ruling, stating that mere possession of a TRC does not prevent an inquiry into conduit entities and upheld the taxability of the transaction in India.

Why It Matters: I-T dept to assess Tiger Global's Flipkart exit tax after Supreme Court ruling favors India.