Uncertainty over tax liabilities is believed to be one of the major reasons for an estimated USD 1 billion stake sale by Patni Computer Systems to US-based IT firm iGate getting stalled at the eleventh hour.

Tax issues related to a non-compete fee to be paid to the firm's promoters and capital gains tax have delayed completion of the deal, according to sources.

However, the companies declined to comment on the reasons for the deal being held up.

Shares of Patni slid 1.48 per cent on the Bombay Stock Exchange on Monday after iGate called off a news conference scheduled for Sunday, where a formal announcement on the deal was expected to be made.

The scrip closed marginally lower by 0.28 per cent at Rs 468.30 on the BSE today.

The Patni brothers -- Narendra, Ashok and Gajendra Patni -- were in talks to sell their 46 per cent stake in the company to a consortium of iGate and Apax Partners, while private equity firm General Atlantic was also expected to sell its holding of around 17 per cent in the software services exporter.

Both parties have to arrive at a mutual term for a non- compete fee, which will take some time, experts said, though they declined to comment on a particular timeframe for closure of the deal.

Sources in-the-know said the terms of the estimated USD 1 billion deal are still being worked out.

According to Indian tax laws, capital gains tax is a tax payable on the sale of assets, capital accumulation and investments, besides certain other transactions.

"There may be issues related to non-compete fee and capital gains tax and Patni and iGate need to work on this to get a clear picture to the tax-related liabilities from the deal," tax experts said.

The controversy over Vodafone's USD 11 billion buyout of Hutchison's stake in telecom joint venture Hutch-Essar in 2007 seems to have given both parties reason enough to re-evaluate the modalities of the deal, as Vodafone is being asked to pay Rs 12,297 crore as tax for the 2007 acquisition.

It is apprehended that the deal with US-based iGate and private equity firm Apax Partners, might also run into similar tax issues, as both are overseas entities, experts said.