Sachin Bansal pays an advance tax of Rs.699 crore on gains from Flipkart

As per a news source, Sachin Bansal, Founder of the e-commerce platform Flipkart, has deposited an advance tax of Rs.699 for the first quarter of 2018-19. The amount includes capital gains tax from his income on sale of Flipkart stake to the US-based Walmart. His partner and co-founder Binny Bansal is yet to disclose the capital gains made on his stake sale in the e-commerce platform.

Notices were sent by the Income Tax Department to both the founders of Flipkart, along with other stakeholders to disclose capital gains made by sale of their shares. Similar notices were served on Walmart to ensure it pays withholding tax on capital gains made by foreign stakeholders of Flipkart. Months after Walmart acquired 77% of Flipkart’s share for around $16 billion, the company paid Rs.7,440 crore to the I-T Department as withholding tax last year.

The Bansals have not explained the total payments received from the sale, the capital gains liability and also how the tax payments have been scheduled. Flipkart is a Singapore-registered company, and SoftBank and eBay were its major shareholders before it was acquired by Walmart.

A capital gains tax of maximum 40% may be applicable on SoftBank. eBay will also have to pay short-term capital gains tax, but its rate of tax is likely to be 20%, taking into consideration DTAA (Double Taxation Avoidance Agreement) with Singapore. The Tax Department is yet to calculate the actual capital gains tax applicable in the deal as it is investigating the complex structure of investments made in Flipkart Ltd (Singapore).