Capital Gain on sale of shares holding

175 views 4 replies

Rahul sharma

article asistant

33 Points Joined March 2014

Hi experts,

We have Group of companies and one of our company sale out last year. ( Nature of sales: Buyer of the company transfer amount (Rs )of shares to direct shareholder )

Now capital gains arise in the hand of shareholders. so please suggest to me how to account received amount in the bank and how can I calculate the capital gain

Replies (4)

JGM

Knowledge Sharer

443 Points Joined September 2021

As rightly mentioned in your query, the gains arising from sale of shares will be taxable in the hands of the shareholder(s) and not in the hands of company whose shares are sold.

I believe, you are looking at taxation from the perspective of seller (i.e. shareholder). In this regard, please note that if the company (whose shares are sold) is a listed entity and the gain is less than INR 1L and is held for more than a year, you can claim exemption. If not, then the gain will be taxed as long term capital gains. You can consider claiming indexation benefit. For computing capital gains, you need to apply following formula:

Sales Consideration

(-) Cost of acquisition (if held for more than 1 year / 2 year, indexed cost of acquisition)

Capital Gain / (Loss)

Rahul sharma

article asistant

33 Points Joined March 2014

Thanks for sharing your experience
can provide me an index chart for computation of LTCG
and if you have any example for valuation of the LTCG related to my query, please