India: Capital reduction through share cancellation resulted in transfer of capital asset (Supreme Court decision)
Transfer potentially created capital gain or loss in hands of shareholders
The Supreme Court held that a reduction in share capital of a company through share cancellation, in which the shareholders received consideration for the reduction, resulted in a transfer of a capital asset (i.e., shares or rights in shares) potentially creating capital gain or loss in the hands of the shareholders.
The case is: PCIT v. Jupiter Capital Pvt Ltd
Read a January 2025 report prepared by the KPMG member firm in India