Profit on sale of shares

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Querist : Anonymous

Querist : Anonymous (Querist)

09 October 2013 One person has Shares in materialized form. The shares are not appearing in the books of account because purchased 25-30 years ago. Now a person Wants to sell the shares and selling price of shares are handsome money amounting to 15-16 Lakhs. Now what are the consequences in the above case. i.e. How to take money in the books and what to do if we want it to prove as Long term Capital Gain subject to STT, hence sale proceeds being Long Term Capital Gain exempt under sec 10(38).

Nikhil Kaushik

Nikhil Kaushik (Expert)
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10 October 2013 when yous sell the shares, the broker will issue a contract note. STT should be mentioned therein and shall be the required proof.

Is the concerned person required to maintain books as per 44AA. please check this.

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 Person is required to maintain books u/s 44AA. My question is about taxability of transaction.Thanks...!!

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 Whether we have to offer sale proceeds liable to tax u/s 69B or we can enjoy Exemption Benefit u/s 10(38)??

Nikhil Kaushik

Nikhil Kaushik (Expert)
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10 October 2013 69B applies when u have investments not recorded at proper amounts. In this case you are liquidating unrecorded investment.
Ideally you should pass an entry in your books to record the unrecorded asset first. The materalised share certificate will be the proof the share was bought long ago (thus it cannot be claimed that it is unexplained investment).

then convert the shares into demat form and sell on stock exchange to claim exemption under 10(38).

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