free shares

Dear Ritu,

I think the entry should be:-

Free shares Received A/c       (250 x 10)                             Dr.     2500                         

        To Donor A/c            (250 x 10)                                                                  2500

(Being shares recd. without any consideration)

   (It is assumed that each share costs10)

1) When you sell the Shares within 1 year and you gain profit, then the profit will be charged @ 15% under the Head Capital Gains as Short term Capital Gains.

2) And if you sell the shares at a profit after 1 year, then the profit earned will be charged @ 20% as Long Term Capital Gain.

Regards,

Devendra Kulkarni

Dear Devendra,

If we pass this entry, we actually meant that we have purchased this entry from the donor, say for example "RCIL" is the donor, therfore in that a case we cannot pass this entry.

And, I doubt that the Shares received Without Consideration has no Value to it and therefore is not chargeable to tax. I am not sure but wanted to know the entire thing.

Regrards,

Ritu

YOU HAD TOLD THAT YOU HAD RECEIVED IT FOR FREE SO THE TREATMENT SHOULD BE AS LIKE BONUS SHARE 

WHEN YOU RECEIVE ONLY STOCK WILL INCREASE : NO JOURNAL ENTRY

WHEN YOU SELL :1) When you sell the Shares within 1 year and you gain profit, then the profit will be charged @ 15% under the Head Capital Gains as Short term Capital Gains.

2) And if you sell the shares at a profit after 1 year, then the profit earned will be charged @ 20% as Long Term Capital Gain.

BUT REMEMBER YOUR ENTIRE SALE CONSIDERATION WILL BE YOUR CAPITAL GAIN AS IT IS FREE.

HOPE THIS WILL SOLVE YOUR PROBLEM

Hey Riswa,

true that the shares are received without consideration but in Tally in order to show the bonus shares seperately wht shud be entry to be passed...? I hope u understood wht i meant..?

AS IT IS WITHOUT CONSIDERATION YOU CANT PASS JOURNAL ENTRY BCZ MONEY IS NOT PAID SO WE CANT CREDIT ANYBODY'S ACCOUNT

NOW YOUR PROBLEM IS HOW TO INCREASE INVENTORY?

FOR THE SAKE OF INCREASING SHARES JUST DO ENTRY IN SHARES ITEM AND SHOW AS OPENING BALANCE THAT NO OF SHARE AND NOT VALUE

exactly... ! we cannt credit any one's account..! bt jus thot if thr wud be ne entry which cud be posted. any wys thnx..!