Dear Sir/madam,
I have received Rs. 125.39 and Rs. 130.45 in my bank account as Fractional Entitlements on bonus shares of 2 companies, i.e. being awarded a certain number of shares, in a defined proportion for the shares already held. So, I received these amounts in lieu of 0.5 and 0.66 shares, respectively of the above said companies.
Now, since these are fractional entitlements for BONUS SHARES, what shall be their tax treatment?
The amount is considered as tax exempt.
Thanks. Any relevant section to substantiate it? I'm asking because I've read some views and some are saying that it may be considered as "deemed dividend" !!
Bonus shares are issued at nil cost, and these are not sold.
There are different opinions over the issue.
Most appropriate one is to reduce the 'cost of purchase of original shares'
Boutique Investment Bank & Transaction Advisory Firm
Gurgaon
CA
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Vardhaman Group of India
Pimpri Chinchwad
CA Inter
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CAclubindia
