Tax Implication of Shares

This query is : Resolved

parag (Querist)
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11 February 2010 Hi,
Few days ago my friedn has transferred shares of Mundra Port from his demat account to my demant account as he don't have trading account with any broker. I have sold this shares to another person and he has paid me money. Then after I have paid payment of this shares to my fried through cheque from my bank account. I want to know that will this attract short term capital gain on me? If so then at which rate. Please reply. I will be very thankful to you.

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
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12 February 2010 Hello,

See, off course this will attract STCG on you and you have to pay tax accordingly @ 15% (sec 111A).

But, I think whatever amount you received you paid to your friend, if it is so then your Cost of Acquisition of those shares will be exactly equal to your Sale Consideration, therefore in this case your STCG would be NIL, hence no tax liability.

see the below example:

You sold 100 shares@Rs. 50 per share and recieved Rs. 5000 and same amount you paid to your friend, therefore computatoin will be:

Sale consideration (100*50) = 5000
Less: exp. on transfer = 0
Net Sale consideration = 5000
Cost of Acqusition (100*50) = (5000)

short Term Capital Gain = 0

Please Note:
exp. on transfer deduct accordingly.

Regards!!!

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