Indexation

This query is : Resolved

KALYANA SUNDARAM.T.V. (Querist)
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11 November 2011 I am holding a rights share issued by my company. The cost paid is Rs.15/- which is inclusive of premium of Rs.5/-.

Now i am going to sell the same. Please advice me for calculating the indexation value the value should be taken inclusive of premium or exclusive of premium.

Regards

Kalyan

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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11 November 2011 If you have held the right share for a period exceeding 12 months, then the share is a long term asset and the benefit of indexation will be available.

The indexed cost of acquisition will be calculated as under:

Cost*CII of the year of transfer/CII of the year of acquisition.

CII = Cost Inflation Index

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 November 2011 The cost of acquisition of rights shares is the amount which is paid by the subscriber to get them. Therefore,in the cited issue, cost of acquisition is Rs.15/- per share.

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