Profit on transfer of shares in pvt ltd company
This query is : Resolved
JAYAKUMAR.M.G
(Querist)
12 November 2012
Sir
One of my Clients who transferred his shares for Rs 10 Lakhs in a private limited company acquired by him during 2005-06 for Rs 50000 /. In this connection please advice the taxability of the profit in the hands of the transferor.
RGDS
Kindly note that the cost of acquisition is only Rs 50,000/- (FY 2005-06)and the sale consideration is Rs 10,00,000/-(FY 2012-13)
Thank You
One of my Clients who transferred his shares for Rs 10 Lakhs in a private limited company acquired by him during 2005-06 for Rs 50000 /. In this connection please advice the taxability of the profit in the hands of the transferor.
RGDS
Kindly note that the cost of acquisition is only Rs 50,000/- (FY 2005-06)and the sale consideration is Rs 10,00,000/-(FY 2012-13)
Thank You
Tax pundit
(Expert)
12 November 2012
It is assumed that the transaction of sale is at arm's length.
The indexed cost of acquisition has to be ascertained. Naturally there will be a huge loss under the head LTCG and the said loss has to be treated in the manner laid down in the IT Act, 1961.
The indexed cost of acquisition has to be ascertained. Naturally there will be a huge loss under the head LTCG and the said loss has to be treated in the manner laid down in the IT Act, 1961.
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