Capital Gain on Unlisted Shares sold to Foreign

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This discussion concerns a client in India who received 25,000 unlisted shares from a foreign company in 2005-07 as remuneration. These shares were later sold in December 2020 for US$ 0.54 each, resulting in INR 9,78,750. The core questions revolve around whether this entire amount is taxable as capital gains, the applicable tax rate (special vs. slab), relevant sections of the Income Tax Act, and the possibility of claiming exemptions like NHAI or REC bonds. It's advised that the gain is taxable under capital gains, with no exemptions applicable for share sales, and the tax should be paid as advance tax by March 15th.

S Ganesh

S Ganesh (Querist)
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19 January 2021 History: My Client in india done one project on FY 2005-07 with foreign company, but that project was not successful and the company not given salary/remuneration to my client. But they are given 25,000 shares (Unlisted Shares) face value US$ 0.00001 total value USD$ 0.25 (imagine at this is a free of cost and if arise profit he get profit) .

Now, During December 2020, he sold his entire shares at US$ 0.54 to another foreign company, he get the consideration US$ 13,500 * INR 72.5 = total INR 9,78,750/-

Note: He is now working for salary, he get Annual Salary Rs.6,00,000.

My Question:
1. The Entire Amount INR 9,78,750/- is Taxable ?
2. This transaction is taxable under Capital Gain ?
3. Rate of Tax ? (Special Rate or Normal Slab rate) and Which Section deal this ? if Advance tax
Payment requirement this ?
4. If this treated as Long Term Capital Gain, to Claim Exemptions Possible ? (NHAI Bond REC
Bond)

5. he already submit the IT Declaration for FY 2020-21, his Taxable Salary Rs.4,50,000/ - (After Deductions of HRA and 80 C Investments), Salary also taxable ? (Rs.9,78,750 + Rs.4,50,000 he not expected the income of INR 9,78,750)

Dear Experts, Consultants and Students Please Guide me, please advice.
Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 January 2021 10% capital gains tax payable on entire amount of 9,78,750.
No exemption possible for sale of shares such exemption available for sale of property of house or land.
File ITR and pay taxes.

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S Ganesh

S Ganesh (Querist)
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19 January 2021 Seetharaman Sir Thanks for your reply. Sir, Tax on Capital Gain Rs.97,880/- payable in immediately or any time limit available ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 January 2021 Pay the tax as advance tax on or before 15th March.

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