Cost of Acquisition on inheritance of shares

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When you inherit shares, the Cost of Acquisition (CoA) for tax purposes is generally based on the original purchase price of those shares. However, if the shares were sold on an exchange with Securities Transaction Tax (STT) paid, the valuation date might be adjusted to 31st January 2018. For inherited immovable property like a flat, the Fair Market Value as of 1st April 2001 is typically used for calculating the CoA.

Proloy Samaradivakera

Proloy Samaradivakera (Querist)

24 November 2021 I inherited shares from my mother after her demise. These shares were bought sometime in 2007.
It was transferred to me on 15-Sep-20. I sold the shares on 23 Jul-21.
How will the CoA be calculated - will the rate of shares be taken as on 15Sep20 or will the rate be as
of the date originally bought in 2007?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

24 November 2021 As such COA of the original assessee; i.e. 2007.
But if sold through exchange with STT paid, it would be as on 31.01.2018.

Proloy Samaradivakera

Proloy Samaradivakera (Querist)

24 November 2021 OK. Thanks . A followup question on similar lines - instead of shares if the inheritance was that of an unmovable property (flat/house) which was acquired some time in 1980s and inherited in July 2019 and sold in April 2021. How will the CoA be calculated ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

24 November 2021 Fair Market Value as on 01.04.2001.

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