Calculation of capital gain tax on sale of shares

FIFO method(Fist-in-First-Out) to be adopted for determining cost of acquisition and period of holding. Relevant section is extracted below:

Section 45(2A) Where any person has had at any time during previous year any beneficial interest in any securities, then, any profits or gains arising from transfer made by the depository or participant of such beneficial interest in respect of securities shall be chargeable to income-tax as the income of the beneficial owner of the previous year in which such transfer took place and shall not be regarded as income of the depository who is deemed to be the registered owner of securities by virtue of sub-section (1) of section 10 of the Depositories Act, 1996, and for the purposes of—

  (i) section 48; and

 (ii) proviso to clause (42A) of section 2,

the cost of acquisition and the period of holding of any securities shall be determined on the basis of the first-in-first-out method.

Originally posted by : SURESHAN K
	FIFO method(Fist-in-First-Out) to be adopted for determining cost of acquisition and period of holding. Relevant section is extracted below: Section 45(2A) Where any person has had at any time during previous year any beneficial interest in any securities, then, any profits or gains arising from transfer made by the depository or participant of such beneficial interest in respect of securities shall be chargeable to income-tax as the income of the beneficial owner of the previous year in which such transfer took place and shall not be regarded as income of the depository who is deemed to be the registered owner of securities by virtue of sub-section (1) of section 10 of the Depositories Act, 1996, and for the purposes of—   (i) section 48; and  (ii) proviso to clause (42A) of section 2, the cost of acquisition and the period of holding of any securities shall be determined on the basis of the first-in-first-out method.

Thank you for your quick reply.

Is it mandatory to use FIFO (Fist-in-First-Out) method or a recommendation? 

It is mandatory since the wording in the section is " shall be determined on the basis of FIFO method"