COnfused........need help.......

please help.................

Show that as a gift to Mother. Transfer of the share would be at book value. And hence cost will remain the same in Mothers books. 40,000 Less 14,000 is the capital gain. Would be exempt u/s 10(38) as it is a listed security held for more than 1 year. Need not worry about capital gains at all.

HI Mohit,

Agree with Dhawal bro.

Situation 1

1) Its a "gift" exempted by Sec 47 i:e transactions not regarded as transfer.

2) It is not covered by Sec 56 either & therefore will not be taxable in the hands of mother.

3) Accounting entries - No accounting entries will be required. Only thing is the shares will be removed from the "statement of affairs" of the daughter & will now be shown under "statement of affairs" of the mother.

Situation 2

The resultant gain will be a Longterm Capital gain. Cost of acquisition & period of holding pertaining to daughter shall also be considered for computing gains. Indexation will be done. Finally, gain shall be exempt u/s 10(38) if STT has been paid on sale of shares.

Thank you Both.......

but i have a another quary ................

if the market value would......(in total) 55000/- ....

then .......

There is no limit for exemption U/s 10(38) provided its held for more than a year and STT has been paid on sale of shares.

Hope that clarifies.