Please help me in the following case
A friend of mine (resident individual)is allotted 2000 shares on31/03/2004 for 200 US dollars (concessional price )by his company which are listed in LSE .The same has been sold by him on 12/11/09 .What is the LTCG and whether indexation applies?
Dear Vidhya,
1)CAPITAL GAIN WILL ARISE IF HE IS A RESIDENT & ORDINARILY RESIDENT IN INDIA AND BENEFITS OF INDEXATION WILL BE ALLOWED..
2) CAPITAL GAIN WILL ARISE EVEN IF HE IS NOT ORDINARILY RESIDENT IN INDIA IF CONSIDERATION IS FIRST RECEIVED IN INDIA BUT AGAIN BENEFIT OF INDEXATION WILL BE ALLOWED.
What should be taken as sale consideration?What will be the cost of acqusition which has to be deducted?
And also how to indax the cost of acquisition?
Dear Vidhya,
The ideal way is to compute the Capital Gain(AFTER INDEAXATION) in Dollors and then convert the GAIN into Rs. BASED ON THE BUYING RATE PREVAILING ON THE DATE OF SALE..
Indexation Shall apply, best way is to Multiply the capital Gain on date of Sale at Buying Rate.
Dear Vidya,
you have to convert the buying and selling prices into india currency then
you have to aply indexation.
for indexing the cost of aquisition for Eg:
200 us dollars exchange rate on 31/3/09 say 42
200*42 = 8400
indexed cost would be 8422*582/492 the resultant amount would be indexed cost of aquisition
Note: figures i have taken is assumed.
CAclubindia
