Income tax on short term gain

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Anil Gurwara

DEF

39 Points Posted on 18 September 2012

Hi Forum,

Recently my uncle gave me some share certificates of a company as birthday gift and I checked the status of shares and they were not being traded rather a buy back option had come up. I applied all the shares in buy back and got a big sum of money.

My question is :

1. Am i liable to pay Income Tax on the money received by selling/buy back offer? If yes, then how much percent as tax

2. Is there any way i can save tax by investing this money towards my housing loan, fixed deposit, RBI bonds etc?

3. If this is considered as gift from uncle at what rate will this be taxed? What is the proof I need to have to show that the shares were given as gift?

Regards,

Anil

Replies (2)

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Posted on 19 September 2012

u are liable to pay income tax on selling of buyback offer.taxability depend upon holding period(date of sale-date of gift received)

generally if date of buy back is far away for more than 12 months from date of gift,it is long term cpital gain and pay tax @ 20% on gain otherwise it is long term capital gain and taxed @ normal rates

u are again liable to pay tax on share certificates received from ur uncle if he is not relative as gift received from relative is not taxable.this is taxed under the head of income from other soures and taxability @ normal rates applicable to assesse

u can avail benifits of 80c,80ccc,80cce,80cf erc