Grandfathering clause on LTCG applicable for HDFC shares post-merger?

It is merger and not transfer on behalf of you. So, grandfathering clause will remain effective till you sell the newly issued shares.

The newly issued HDFC Bank shares will have a new ISIN. Can I sell these shares quoting my date of purchase as the date of purchase of my HDFC shares, quote purchase price as the price on 31/01/2018? My doubt is since the new ISIN would not have existed on 31/01/2018.

Thanks.

Your doubt is genuine, but you will have to convert the price of HDFC ltd, as of 31/01/2018 to the shares allotted of HDFC bank ltd. The new rate obtained this way need to be filled manually.

The same is procedure adopted in all such mergers.

Secondly there will be many investors like you holding the shares for long term.

Thanks, Sir, for the clarification.

You are welcome.                      

So according to your above reply on Grandfathering of HDFC shares - since the closing price of HDFC shares as on 1-1-2018 was 1963 - and conversion Ratio was 1.68 - then the Grandfathering rate will be 1963/1.68 that is Rs 1168.

Please confirm is this calculation is correct. In the return form I have to give ISIN number of shares sold - which will be of HDFC bank. But for grandfathering rate I will be putting the rate of HDFC which is 1168 where was the grandfathering rate of HDFC Bank was 1007. 
Do the run the risk of addition of 1168-1007 that is Rs 161 - as there is no place I can mention in the return that the shares sold were issued due to merger and hence grandfathering RATE  of HDFC has been taken ...

@ Sanjeev Hingorani

Your question is very valid but also very complex. Many must be in same situation like you.

I got a headache by just reading it.

The issue may land in ITAT finally for a decision. 

I believe the grandafathering rate you must put is NOT the price of HDFC Ltd on 31/01/2018, but the same price multipled by 42/25 (swap ratio) since we are talking about HDFC bank and the entity we are holding is HDFC Ltd.