Capital gains

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chaitanya cherukuri (Querist)

24 April 2012 Hai Everybody,

i need your inputs on Computation of capital gains when one company shares are transfered in exchange of other company Shares. My Company's promoter and his friend has promoted two companies each having substantial shares in two companies. Now they mutually agreed to separate, and decided to takeover one company each. accordingly they are effecting share transfer.Only consideration to each other is just shares transfer. thats it. now the question Capital gains is araising. whether Capital gains provision are applicable to this case or not.

and gift provisions may be applicable in this case. as value of shares being transferd may not be equal to value of shares being received.

please advice on this issue also

thanks in advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

24 April 2012 Exchange is also treated as transfer and Capital Gains Provisions are applicable to
the transferor pf shares.
.

It is not proper to say that the value of shares being transferred is not equal. If Ashok Bhai transfers 5000 shares of M Ltd to Mahesh Bhai for 4000 shares of A Ltd., it means the value of shares is equal, price is not equal.
.

chaitanya cherukuri

chaitanya cherukuri (Querist)

25 April 2012 If exchange is also taxable under capital gains. then how value the non monetary consideration. there are no rules in income tax and income tax rules. please guide me on that.

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