Query on Fractional Entitlement on Bonus Shares

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?

Replies (4)
Quick Summary
This discussion explores the tax implications of receiving cash amounts in lieu of fractional bonus shares. The user received small sums for fractions of shares from two companies and is seeking clarification on whether these amounts are tax-exempt or could be considered a 'deemed dividend'. While bonus shares themselves are typically not taxed upon receipt, the cash received for fractional parts raises questions about its taxability.

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'

Tax is not applicable

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