Income tax on long term capital gain.

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K.G.Shah

K.G.Shah (Querist)

05 June 2019 Sir, I am Sr,Citizen and I have received 100 shares from ancestral property.before 20 to 25 years. Due to allotment of bonus every 3-4 years, the market value of shares now become more then 40 to 50 Lakh. I wish to sale 3 lakh value of shares every year . My quaries are as under.
1) Suppose in June-2019 if I sold 1000 shares @ 300= Rs. 300000. Since the cost value is zero to me. So I wish to consider the cost as on 1st Jan-2018 ( as per the last budget amendment) which was also Rs. 300 . So long term capital gain is zero or say very negligible . If their is gain i will pay tax @ 10 % as long term capital gain. Whether my stand is correct ?
2) I have to file income tax return every year? Shares sold 3 Lakh, but capital gain is almost zero in 2019-20. and I have interest income of Rs. 3 lakh which is under taxable limit .
3) MY son says instead of sales of shares in open market, the 1000 shares be transfer to him at market rate, for which he will pay the amount so as to avoid borkerage on purchase and sales . Is it possible ? Then what will be tax impact on me as well as when he will sold the shares in market. The rate at which he will pay amount will be consider his cost of acquizition ? ... SO their some cofusion. I have contacted here some income tax advisor but they are not sure . Since i am not getting pension, I wish to liquidate the entire shares in next 10-15 years. What advise you will give. Please advise me here or send reply to my email id shahkg@rediffmail.com

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 June 2019 1 Your stand is right.
2 You have to file return every year if you sell shares.
3 Transfer the shares to your son as gift the cost for him as on 1st Jan-2018 ( as per the last budget amendment)

K.G.Shah

K.G.Shah (Querist)

06 June 2019 Thanx for reply . Ponit number 1 and 2 okey . As against point number 3 , you have advise me to transfer share as gift . That is fine . But as against he is going to transfer the amount at market rate . What treatment in.accouts be given.for the.amount received from.him . That also.required to be treat as gift .

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 June 2019 3 That is allowed as private sale. Teat it as sale of share.

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