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How and what cost to show for shares sold that date back to decades in a itr

Pushkar (Article) (25 Points)

18 July 2016

Kindly help by telling how and what cost should be shown in the ITR for the shares sold by the taxpayer in the PY that were purchased decades back although im aware that the gain is long term and exempt from any tax..How and what amount of purchases should be shown in the ITR under Capital Gains?

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3 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 18 July 2016

Do you mean how CG would be calculated? If yes, here it is:

Net sales consideration
(-) Cost (or indexed) of acquisition [whichever applicable]
(-) Expenses on transfer
Balance is the CG

Hope this is what you meant to know.

Pushkar (Article) (25 Points)
Replied 19 July 2016

Why should the cost of shares be indexed..that is totally wrong as i said the shares are listed and STT paid so there are no taxable capital gains U/s 10(39). I want to know what amount can be shown as the cost of these shares in the ITR as the shares were purchased in physical form more than decades ago..

Indexation does not apply here

CMA Poornima Madhava (CMA) (13097 Points)
Replied 19 July 2016

Why can't it be indexed? As I understand, there is no restriction of indexation in case of listed shares. However, there is an option to compute CG without indexation, in which case tax is payable @ 10% (instead of 20%). But if the transaction is covered by STT then CG is exempt u/s 10(38) and if not covered by STT, then you can either opt for 10% tax (without indexation) or 20% tax (with indexation). What am I missing here?