Tax after redemption of pref. shares

Redemption of preference shares will be a capital gain event.

Cost of shares would be calculated on proportionate basis for all the shares received.

Cost of preference shares or any shares will be the actual cost incurred. For example Mr. A purchased Shares from B Ltd. at 1000shares*10=10000/-. Then A Ltd. acquired B Ltd. and share holders of B Ltd were alloted 10 shares in exchange of 1 share of Rs10(1000shares*10(exchange)*10). So the value has become 100000. In this example the cost is 10000/- and profit if sold is 90000/-(100000-10000) 

As per section 47 of the ITA, amalgamations or mergers qualifying under section 2(1B) are tax neutral. As such, any gain in the hands of Cairn or its shareholders resulting from the transfer of shares pursuant to the Transaction will be exempt from capital gains tax.

I am not a CA but you can verify this from your CA before filing ITR.