Sale of shares

Save Share

This query is : Resolved

shweta (Querist)

05 October 2009 Mr X, brother of Mr y holds some shares in physical form.Mr X is an NRI , but has demat a/c ( without trading facility).Mr Y has demat with trading facility , so Mr X requests Mr Y to get the shares converted in demat form & sell them in Indian Market.Mr Y performs the same for Mr Y.The entire sale proceeds of shares sold by Mr Y , is transferred by Mr Y to Mr X. Hence is it necessary for Mr Y to show this sale of shares in his return of income , as Mr Y does not file return of income due to his NRI status ?

CA. Vinod Pandey

CA. Vinod Pandey (Expert)

05 October 2009 Dear Shweta,

Could you plesae confirm that on what basis share in physical form lying with Mr. X. have been converted in demat form of Mr.Y and Mr Y performed the request of Mr. X to sell the same in indian market?
As well residential status of Mr. Y ?

Nischint Kumar Somani

Nischint Kumar Somani (Expert)

06 October 2009 in my opinion
as per the provisions of section 5 any income accrue or arise in india or received or deemed to be received in india is taxable in the hands of every person.in context of the provision mr x trfs his shares it will be deemed his shares has been transfered to mr y and mr y has become the owner of such shares, further if he is recipient of income on the sale of such share such income will be taxable in the hands of mr y not in the hand of x

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now