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How is the amount received by a company offering a IPO taxed

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mayank (Querist)
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29 June 2009 If a company brings out an ipo how is the money recieved taxed. (suppose FV is Rs 10 and issue price is Rs 50 i.e premium of Rs 40, what will be the tax treatment?)

CA Kartik Pandya

CA Kartik Pandya (Expert)
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29 June 2009 My dear Mayank, See this Rs.40 is not taxable income but what you have gained by selling this 50rs. of share in market is actual taxable income. e.g. if u have sold it at Rs.60 then your short term capital gain(subject to you have sold it within 12month) is Rs.10 and on that STCG you have to pay the tax.

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