Published
Sep 3, 2018
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Income Tax Department to wait until September 7 for Walmart to pay tax on Flipkart deal

Published
Sep 3, 2018

The Income Tax Department has announced that it will wait until September 7 to settle Walmart’s withholding tax on payments made to around 44 shareholders as part of the Flipkart acquisition deal.


Flipkart- Facebook


US-based Walmart made payments to around 44 of Flipkart’s shareholders as part of its acquisition of 77 percent of the company which was finalised mid-August and valued at around $16 billion. Tax on these payments is due and the Income Tax Department will wait until September 7 for a settlement of this before it proceeds in the ongoing case.

Walmart is required by income tax law to deduct withholding tax on payments made to sellers and pay the tax to the Indian authorities on the seventh day of the subsequent month, which will fall on September 7. Walmart has not yet contacted the Income Tax Department about this.

After Walmart has paid the withholding tax, the authorities can then decide whether Walmart has handled the taxes correctly ascertained through an assessment to be made by the tax department that will scrutinise Walmart’s acquisition agreement with Flipkart. If Walmart is found to have deposited an incorrect amount of tax then a further investigation will follow.

Some of Flipkart’s major shareholders including SoftBank, eBay, and Naspers have all agreed to sell their shares to Walmart as has one of Flipkart’s co-founders, Sachin Bansal, who has now left the company.

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