Go AD-FREE with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Ltcg

Tax queries 125 views 1 replies

Aastha Bhutda

Looking actively for Job

37 Points Joined November 2009

Hi,

I have few query with regard to LTCG:

1. What will be the impact of LTCG if stock in trade (consisting of shares) is converted into investment? Will the grandfathering impact can be considered or not?

2. How about the taxation of capital gain on gift of shares? Will the capital gain on this transaction attract section 112A? As 112A mentions securities transaction tax been paid on acquisition and transfer of such capital asset?

Replies (1)

nikhil

221 Points Joined February 2014

Ans. to query 1-
Pay tax when stock got converted into capital asset based on Fair market value. it will be taxed as business income.
Also when this capital asset is sold then tax is to be levied based on cost of aquisition as Fair market value which was calculated while paying tax on conversion of stock into capital asset
Ans to Query 2-
There is exception list to section 10(38) in cases where Securities transaction tax is not paid but benefit of section 10(38) can be availed in which gift is covered
I think that exception list is also applicable for this section 112A.