In a significant development for Indian capital markets and global investors, Antfin—a subsidiary of Chinese conglomerate Alibaba Group—has successfully offloaded a ₹2,100 crore stake in fintech firm Paytm without paying any capital gains tax in India. The reason? A smart use of the India-Netherlands tax treaty. Here’s a closer look at how the deal unfolded, what made the tax exemption possible, and the broader implications for Paytm and its shareholders.
In this article, we’ll dive into the details of Antfin’s ₹2,100-crore Paytm stake sale, the tax exemption it secured, and what it means for investors and the future of Paytm.
The Transaction: Antfin Offloads Paytm Shares
On May 13, 2025, Antfin sold 2.54 crore shares of Paytm (One97 Communications Ltd.) at an average price of ₹824.60 apiece, amounting to a total transaction value of approximately ₹2,100 crore. The shares were sold through the open market, and the buyers were clients of Goldman Sachs Singapore, according to stock exchange bulk deal data.
Following the deal, Paytm’s stock took a hit—falling 4% on the day of the transaction—and settled at ₹850 on May 14, down 0.7% from the previous close.
Tax-Free Gains via the Netherlands Route
While the transaction may have raised questions about tax liabilities, tax experts clarified that Antfin will not be required to pay capital gains tax in India due to the India-Netherlands Double Tax Avoidance Agreement (DTAA).
According to the treaty, capital gains made by a Netherlands-based entity from the sale of Indian shares are exempt from Indian taxes, provided two key conditions are met:
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Ownership Threshold: The Dutch entity must hold less than 10% in the Indian company at the time of sale. Antfin held 9.85% in Paytm—just under the threshold.
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Buyer Requirement: The shares must be sold to a foreign entity. In this case, buyers were foreign institutional clients of Goldman Sachs in Singapore.
Amit Singhania, founder of Areete Law Offices, emphasized, “The Netherlands entity will still need to demonstrate commercial substance to qualify for the tax treaty benefits. This is to ensure the transaction isn’t routed through the Netherlands solely for tax avoidance.”
Paytm’s Market Struggles Continue
Paytm has had a rocky journey in the public markets. After its spectacular IPO in 2021, the stock briefly touched a high of ₹1,782 in November 2021, but has struggled to cross ₹1,000 since late 2024. In 2025 alone, the stock has dropped more than 14%, lagging behind the benchmark Sensex, which gained 3.2% during the same period.
The company currently has a market capitalisation of ₹55,000 crore.
Financial Performance and Regulatory Settlement
In the December 2024 quarter, Paytm reported:
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Revenue: ₹1,491 crore (up from ₹1,265 crore in Q2)
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Net Loss: ₹205 crore (compared to a ₹821 crore profit in Q2)
Separately, founder Vijay Shekhar Sharma and Paytm settled a case with SEBI, paying over ₹2.2 crore as a settlement fee. In addition, Sharma agreed to cancel 2.1 crore ESOPs granted/vested and not exercised, while his brother Ajay Shekhar Sharma relinquished 2.22 lakh ESOPs.
Sharma directly owns 9.05% of Paytm, and indirectly controls another 10.24% through a Mauritius-based entity, Resilient Asset Management.
Past Deal Between Antfin and Sharma
This isn’t Antfin’s first offloading of Paytm shares. On August 7, 2023, the Chinese firm transferred a 10.3% stake to Resilient Asset Management, making Sharma the largest shareholder. The deal was structured using Optionally Convertible Debentures (OCDs) and did not involve cash.
Credits: MoneyControl
Key Takeaways
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Antfin leveraged India-Netherlands DTAA to sell its Paytm stake tax-free.
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The deal highlights how international investors structure cross-border transactions strategically to benefit from tax treaties.
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Paytm continues to struggle in public markets but remains a focal point of investor interest due to its evolving ownership and regulatory scrutiny.
With Antfin’s stake now down and Sharma further consolidating control, all eyes are on how Paytm reinvents its growth narrative and rebuilds market confidence in the months to come.
