Dividend Stripping - Section 94(7)
Suppose Record Date for Dividend / Income - 31.01.2010
Acquisition of Shares / Units of MF – Within 3 months prior to the record date (01.11.2009 till 31.01.2010)
Sale or Transfer of
· Shares within 3 months after the record date (01.02.2010 till 30.04.2010)
· Units of MF within 9 months after the record date (01.02.2010 till 31.10.2010)
…………….. in such a case, short term capital loss if any arising on the sale of such shares / MF Units, shall be ignored to the extent of dividend / income received or receivable thereon.
Example - (In the case of Shares) -
|
Particulars |
Case I
|
Case II |
Case III
|
Case IV
|
|
Dividend received (31.01.2010) |
20000 |
20000 |
20000 |
20000 |
|
Sales Consideration |
270000 (01.05.2010) |
270000 (30.04.2010) |
270000 (01.05.2010 |
270000
(30.04.2010) |
|
Less: Cost of Acquisition |
300000 (01.11.2009) |
300000 (31.10.2009) |
300000 (31.10.2009) |
300000 (01.11.2009) |
|
Short Term Cap. Gain / (Loss) |
(30000) |
(30000) |
(30000) |
(30000) |
|
Less: Capital Loss to be ignored u/s 94(7) |
- |
- |
- |
20000 |
|
Short Term Capital Gain / (Loss) for the purpose of computing income chargeable to tax |
(30000)
Loss |
(30000)
Loss |
(30000)
Loss |
(10000)
Loss |
|
Particulars |
Case V |
Case VI
|
Case VII |
|
Dividend Received
(31.01.2010) |
20000 |
20000 |
20000 |
|
Sales Consideration |
310000 (30.04.2010) |
290000 (30.04.2010) |
300000 (30.04.2010) |
|
Less: Cost of Acquisition |
300000 (01.11.2009) |
300000 (01.11.2009) |
300000 (01.11.2009) |
|
Short Term Cap. Gain / (Loss) |
10000 |
(10000) |
NIL |
|
Less : Capital Loss to be ignored u/s 94(7) |
- |
10000 |
- |
|
Short Term Capital Gain / (Loss) for the purposes of computing income chargeable to tax |
10000
Gain |
NIL |
NIL |
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