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

Tax queries 482 views 5 replies

mohit pathak

Learner

396 Points Joined January 2009

Situations:-

1) Mrs. X (date of marriage 07/12/2009) transferred following shares on 08/12/2009 to Mrs A (mother), without consideration, in D-mat form…

Scrip	Purchase Details			MPS as on 08/12/2009
	Date		Amt
A Ltd	15/02/2008		3000	8000
B Ltd	27/04/2008		7000	12000
C Ltd		15/07/2007	4000	20000
TOTAL			14000	40000

2) Mrs A (mother) further sold shares of A Ltd on 15/03/2010 at gross amount 20000/-

Qus :-

Situation 1:---- 1) Type & Amount of gain / loss arised (if any) …..

2) Is the transfer is taxable in the hands of Mrs. A…..

3) Accounting entries for both side…..

Situation 2:---- Type / Amount of capital gain earned by Mrs. A ….

(Please specify section / provisions / case law / notifications / circulars (if any) in this regard…)

Regards…

Mohit Kr. Pathak

Replies (5)

mohit pathak

Learner

396 Points Joined January 2009

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

Dhawal Mohnot

Practicing

449 Points Joined October 2009

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.

Amir

Learner

4016 Points Joined December 2009

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.