Shapoorji Pallonji (SP) Group will have to pay hefty tax to the government under its latest proposal for an exit from Tata Sons.
Tax experts said under the current provisions of tax laws applicable to capital reduction, the recipient (SP Group) would be chargeable to deemed dividend (to the extent of the distributing company’s free reserves) and in relation to the fair value of assets over and above such free reserves, there would be capital gains tax to be paid to the government.
Tata Sons had free reserves of Rs 45,545 crore as of March this year and the Mistrys