It has also revealed plans to take its stake-hold as high as 85 per cent.
SoftBank, which was an early investor in Alibaba, has committed investments of over $10 billion in India.
A Flipkart IPO is unlikely to happen for many years to come, as Walmart Inc. will have to invest heavily to make its $16-billion acquisition work. Softbank had also invested about $900 million in Snapdeal in the hope the e-tailer would be able to challenge Flipkart's market leadership.
The Hindu Business Line on 12 April, citing data by start-up research and data analytics firm Tracxn, reported that SoftBank has invested more than $8 billion in the Indian e-commerce and internet market over the past five years.
At the time, Son suggested that SoftBank, which invested through its Vision Fund, would see a sizable return on its initial investment of $2.5 billion. Here, it is worth mentioning that Flipkart is an Indian e-commerce giant.
SoftBank had a change of mind barely 24 hours after the Bentonville retail giant announced it is purchasing 77% stake in Flipkart - including SoftBank's total share - for $16 billion valuing India's largest e-commerce company at over $21 billion.
The department now is going through the Section 9 (1) of the Income Tax law, which deals with indirect transfer provisions, to see if the benefits under the bilateral tax treaties with countries like Singapore and Mauritius, could be available for foreign investors selling stakes to Walmart.
Bengaluru-based Flipkart had scooped up a staggering $2.5 billion round in August past year.
When contacted, a SoftBank spokesperson declined to comment.
He added that SoftBank had earlier agreed in writing to sell its stake and exit Flipkart altogether, and "there are two-to-three other investors coming in but Walmart will always retain a clear majority".
Walmart CEO Doug McMillon (left) with Flipkart co-founder Binny Bansal.
"So if SoftBank says something that Walmart doesn't agree with, there still have to be discussions". Barely days after Walmart announced its plan to buy Flipkart, online marketplace eBay said it will end its strategic partnership with the latter and relaunch eBay India with a differentiated offer to focus on cross-border trade.
If the company is taken public in this way, the caveat stated, it will be at a valuation no less than that paid by Walmart - $20.8 billion. Post this round, SoftBank is slated to have a controlling stake.