I had purchased shares of a listed company in 2012. SEBI has delisted the scrip as the management has not paid fees and has also not complied with SEBI regulations since last two years. I want to know whether these shares will be considered as listed or unlisted for the purpose of disclosure in ITR form. I do not have PAN of the company, what should I mention in the ITR form?
—Suraj Kumar
As per SEBI (Delisting of Equity Shares) Regulations, 2009 delisting of securities means removal of securities of a listed company from a stock exchange. Accordingly, delisted securities will be treated as unlisted securities and you will be required to disclose the details of such shares in your income tax return form. CBDT on August 8, 2019, through Circular No. 18 of 2019 in answer to question no. 5 clarified that PAN of the company which was previously listed in a recognised stock exchange, but delisted subsequently will be required to be disclosed. In case PAN of the delisted company cannot be obtained, you may enter a default value in place of PAN, as in ‘NNNNN0000N’ (the characters after the sixth N is zero). Hence, if you could not obtain PAN from the company you many mention PAN as ‘NNNNN0000N’.
I am an individual born in India and holding an Indian passport. My residential status was ‘resident’ till March 31, 2015. I am a director in a private limited company and a partner in one LLP in India. I left India on July 1, 2015 and started my business in Singapore. My stay in India for each of the financial years till March 31, 2019, is less than 182 days. Whenever I come to India, I participate in the board meeting of the LLP and take decisions. What will be the status for FY2018-19? I have stayed in India for more than 365 days in the last four years. — Rahul Agrawal
As per Section 6 of the Income Tax Act 1961, a person is considered as resident Indian if either of the two conditions are fulfilled: i) if his stay in India is more than 182 days or
ii) if his stay is more than 60 days in a current year and more than 365 days in the previous four years. As per explanation 1(b) provided under Section 6 of the Act, an Indian citizen or a person of Indian origin who, being outside India, comes on a visit to India in any previous year, the condition of 60 days gets replaced by 182 days. Considering the facts in your case, your stay in India can be treated as visit to India, and the benefit of 182 days under explanation 1(b) of Section 6 will be available to you for determining your residential status. Accordingly, your residential status will be nonresident and only income earned in India will be taxable.
However, there is a risk of litigation, as the tax authorities may not treat your stay in India as visits, but as business purpose. Hence, it is advisable that when you are in India you do not take active participation in the operation of the entities where you have business interests.
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By DILIP LAKHANISenior Chartered Accountant