Stcg/ltcg valuation for demerged shares.

Tax queries 386 views 12 replies

I have got shares of Reliance Home finance ltd from Demerger of Reliance Captial ltd. My q is

1) If i sell the same  -is it LTCG or STCG

2) how the acquired value is calculated for capital gains.  

Replies (12)

which date it is transfer in your name 

Aug 2017 I got into my demat account.

u have not purchase it so u may consider that date

and what is ur date of sale 

see the difference if it is more than one year or more

and then apply cg rules for ltcg and stcg

I am holding Reliance Capital for last several years.

Reliance Home finance is born out of Reliance Capital.

That is why this q.

it means is it transfer form one to another of name 

Samir - it is demerger from Reliance  Capital   to seperate Co called reliance home finance.

Both are traded now. Part of Reliance Capital is hived off into Reliance Home finance.

The period of holding of reliance home finance shares shall be counted from the date of acquisition of reliance capital shares. Since you are holding reliance capital shares for more than one year the period of holding of reliance home finance shares is also long term.
The cost of acquisition of shares of reliance home finance I.e the resulting company shall the proportion of net book value of assets transferred to net worth before Demerger of the reliance capital.
The cost of reliance capital shares shall be reduced by the cost of shares of reliance home finance as computed as per proportionate method.
The ratio of cost of shares of Demerger and resulting company is generally communicated by the company to its shareholders.

Hmmm Ok Thanks. Once it is LTCG - so it will come in exempt income.

Yes. . . . . Long Term. . . . . So exempt.....


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