Section 94(7)
This query is : Resolved
16 March 2014
Not understanding this Section..
Please Explain this Section with an Example.
Section 94(7).
Nikhil Kaushik
(Expert)
16 March 2014
lets take an example.
I buy reliance shares on 1 April 2014. The record date for the dividend is 30 June 2014. Let the dividend be Rs 10
I sell the shares on 31 July 2014 and incur a loss of Rs 15.
in this scenario loss of Rs 10 shall be ignored and Rs 5 shall be considered for computation of income.
the idea behind the section is that where you try to just buy and sell equity shares for earning exempt dividend income and incur loss after selling the said stock in immediately (loss normally happens because price falls after the record date), income tax department doesnt want such income to be considered exempt!
This is called dividend stripping
I buy reliance shares on 1 April 2014. The record date for the dividend is 30 June 2014. Let the dividend be Rs 10
I sell the shares on 31 July 2014 and incur a loss of Rs 15.
in this scenario loss of Rs 10 shall be ignored and Rs 5 shall be considered for computation of income.
the idea behind the section is that where you try to just buy and sell equity shares for earning exempt dividend income and incur loss after selling the said stock in immediately (loss normally happens because price falls after the record date), income tax department doesnt want such income to be considered exempt!
This is called dividend stripping
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
- ITC not to be taken in accounts & GSTR-3B
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
