Capital gain on sell of shares

Dear All,

I have a query regarding capital gain tax on sell of shares.

My grandfather had some shares in his demat account since very long time (all the shares are held for more than one year). Now after his death we replaced the name of my grandmother in his demat account (so now all those shares are in the name of my grandmother).

Now we want to sell all those shares within 5-6 months from the change in the name of demat account holder.

What will be the tax implication in this case? Will there be any STCG liability arises in this case? Also mention the relevant section number.

 

Thanks in advance 

Replies (5)
If the time period of holding the shares is more than 12months Long term CG else Short term CG

Period of holding of previous person or new person?

Kindly explain in detail.

Hi Dhaval

As per Sec 47 since shares got tfd to ur grandmother, it is not under the definition of TRANSFER U/s 2(47).

as per sec 2(42A) period of holding of ur Grandfather will be counted.

As per sec 49(1) Cost of Acquisition of shares ll be the cost at which ur Grandfather acquired it.

So the nature of Capital Gain ll be Long Term in nature and you ll get indexation benefit.

Hope it ll resolve ur query.

Hi Shiny..

Thank you for your detail reply.

I just want to confirm now that since it is long term it should be exempted no?

Yes its exempted u/s10(38) provided you transact through Stock Market and pay STT.

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