/ Free Tool · India-US Flip Tax Impact

Flip Tax Impact Calculator.

Model the Indian LTCG you (and each shareholder on your cap table) pay when flipping your Indian startup to a Delaware C-Corp parent via share-swap. Compare flipping NOW at current FMV vs flipping LATER at expected Series A / B FMV. Post-July-2024 LTCG rate 12.5% applied.

Inputs - founder shareholder

Model your own flip tax. For co-founders / angels on your cap table, repeat with their numbers.

Your original cost basis in the Indian company (INR) What you paid to acquire your shares. For a founder incorporating at par value: often INR 10,000-1,00,000 total.

Current FMV of your Indian shares (INR) Your % ownership x current company FMV. Early stage: use last-round valuation or realistic current-stage benchmark.

Projected FMV if you delay flip 18-24 months (INR) If you wait for Series A term sheet, what will your shares be worth then?

Holding period of Indian shares

Flipping NOW tax

INR 0

12.5% LTCG post-July 2024 (without indexation)

FMV at swap (now) INR 0

LTCG now INR 0

FMV at swap (18-24 months later) INR 0

LTCG later INR 0

Savings by flipping NOW INR 0

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How flip tax math works.

When you flip your Indian startup to a Delaware C-Corp parent, each Indian shareholder's shares are transferred to the Delaware entity in exchange for Delaware stock. Under Section 2(47) of the Indian Income Tax Act, this is a taxable transfer. Capital gain = FMV of Delaware shares received minus cost basis of Indian shares surrendered.

Rate (post-23 July 2024): 12.5% LTCG without indexation on unlisted equity held 24+ months. Short-term: slab rate (up to ~43% including surcharge). The 20%-with-indexation choice is only for pre-23-July-2024 acquisitions.

Why early flip wins: FMV at pre-seed is low. Current FMV might be USD 2-5M (INR 1.7-4 crore for 100% company). Series A FMV might be USD 50M+ (INR 42+ crore). Same founder cost basis, 10-25x higher gain, 10-25x higher tax. The LTCG rate doesn't change; the FMV does.

Full guide: India-to-Delaware Flip Structure.