Capital losses when new equity was issued due to merger

Hi

I was bought some shares in 2010, and the company merged with another in 2020. So I received new shares. When I sold them last FY, the same is not reflected in capital gains statement by the broker. I suffered capital loss on the sale.

They insist that I should have manually allocated the shares before selling them. 

What is the way out? Kindly help.

 

Replies (2)
Quick Summary
If you've experienced a capital loss after receiving new shares due to a company merger, your broker's statement might not reflect it correctly. You'll likely need to manually calculate your long-term capital loss using your original purchase price and relevant grandfathering rules. Ensure you keep all purchase documents and merger details to support your claim when filing your tax return.

The broker's capital gains statement is not a legally binding document. To resolve the issue, the taxpayer must manually compute the Long-Term Capital Loss using the original 2010 purchase price (Section 49(1)) and the applicable grandfathering rules (Section 112A). This calculated loss should then be manually reported in Schedule 112A of ITR-2 or ITR-3, ensuring all original purchase documents and merger swap ratio details are retained as proof for future assessment.

Thanks, sir. That mostly resolves the confusion.

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