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Cash transfer (after Share sale)

Others 645 views 1 replies

Dear experts,

 

I would like some clarifications / advice on the following:

 

 

Person X buys a few shares on behalf of their friend (Person Y). Y has paid X in cash.

X sells the shares for a profit and pays the Short Term Capital Gains Tax due.

Now Y asks for payment (of the profit after tax) by Cash or Bearer Cheque. Is it advisable and legal for X to do this? Or will it cause any problems during tax reporting / scrutiny? The amount to be paid is greater than 10 Lakhs.

Replies (1)

entire amount is to be taxed in hands of X and all legal consequences to be borne by X only, coz once Y will get the amount he will turn back and never accept the facts of the transactions are in his knowledge.

if X is ready to take such risk, then proceed on.


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