Walmart Inc. paid Rs. 7,439 crores tax on payments it made to buy out shares of 10 major shareholders of Flipkart. Flipkart’s significant shareholders like SoftBank, Naspers, venture fund Accel Partners and eBay, had sold their holdings to Walmart. But Walmart Inc. has not yet done so for another 34 who exited the Indian e-commerce company in the $16 billion deal, according to PTI.

According to a tax department official, “Of the 44 shareholders in Flipkart who have sold shares, Walmart has deposited taxes for only 10 funds and entities. We have asked Walmart to explain the rationale followed while deducting or not deducting taxes from the shareholders. They have been asked to give a case to case explanation.”

Withholding tax, or retention tax, is an income tax to be paid to the government by the payer of the income rather than the recipient of the income. The tax is withheld or deducted from the income due to the recipient. In case of the Walmart-Flipkart deal, the withholding tax pertains to the capital gains made by the shareholders of Flipkart.

According to PTI, a Walmart spokesperson said: “We take our legal obligations seriously, including paying taxes to governments where we operate.” “Following our Flipkart investment, we have completed our tax withholding obligations under the guidance of the Indian Tax authorities. We will continue to work with authorities to respond to their queries.”

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