capital gains very urgent

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Amruta Shewale (Querist)

10 October 2009 On 1-07-2008, X holds foll equity shares in A ltd.
1000 original shares,dt of acq 10-04-1969 of Rs.1 lac
500 bonus-I shares,dt of acq 6-5-1979
750 bonus-II shares,dt of acq 5-10-1988
1125 bonus-III shares,dt of acq 10-05-2006
On 30-9-2008, X trf above noted 3375 shares @ rs.500 per share (fair mkt value on 1-4-1981 is Rs.8 per share).Find out the capital gain chargeable to tax for the A.Y.2009-10.
Suppose in the above eg the Fmv on 1-4-1981 is Rs.110 per share,recalculate the amount of LTCG and STCG chargeable to tax for AY 09-10,if shares are trf outside a recognised stock exchange on 1-09-2008.

Ashish Goyal

Ashish Goyal (Expert)

10 October 2009 Case (i)

Fair Value of Consideration
3375 Shares @ Rs. 500 each 1,687,500
Less:
Cost of acquisition
Original Shares 1000@ Rs. 100 each 100,000
Bonus Shares -I 500@Rs.8 each 4,000
Bonus Shares -II 750 Nil
Bonus Shares -II 1125 Nil 104,000
LTCG 1,583,500
Less: Exemption u/s 10 (38) 1,583,500
Taxable LTCG Nil

Case (ii)

Fair Value of Consideration
3375 Shares @ Rs. 500 each 1,687,500
Less:
Cost of acquisition
Original Shares 1000@ Rs. 110 each 110,000
Bonus Shares -I 500@Rs. 110 each 55,000
Bonus Shares -II 750 Nil
Bonus Shares -II 1125 Nil 165,000
Taxable LTCG 1,522,500

Amruta Shewale

Amruta Shewale (Querist)

11 October 2009 but sir no indexation for this calculation
for original shares =100000*582/100=582000
i got to know that bonus shares acquired prior 1/4/1981 is the fmv on 1/4/1981
coa of bonus I shares=8*500*582/100=23280. Is this right

Ashish Goyal

Ashish Goyal (Expert)

11 October 2009 Case (i)

Yes Amruta.. you will get the benefit of indexation on the Long Term capital Asset...

And in case of any bonus shares acquired prior to 1.4.1981, the FMV as on 1.4.1981 may be taken as Cost of acquisition...So your calculation of COA is absolutely correct.

Case (ii)
Since the shares are sold outside the recognised stock exchange you have the two options:

a)Take the benefit of indexation and pay Tax @ 20 %

OR

b)Pay Tax @ 10% without indexation benefit

Message likes : 1 times

Amruta Shewale

Amruta Shewale (Querist)

12 October 2009 thank you sir

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