Tax calculation on stock split

149 views 1 replies

Hi

When stock split happens, can we sell original shares and book losses, for e.g.

Bought at Rs.4000, after split it is Rs.40, number shares bought 1 and now 100. 

Now If I sell this one original stock, can I book loss of 3960 and hold remaining 99 shares. 

so buying price is 4000 and selling price is 40, how this short term capital gain tax be calculated?

Please clarify.

Thanks

Kumar

Replies (1)
  • Stock splits are not taxable events: You do not pay tax when the split occurs.

  • No "Booking a Loss": You cannot sell the split shares to "book a loss" based on the original pre-split purchase price because the tax cost is adjusted downward proportionally.

  • Reporting: When filing your ITR, ensure you use the adjusted cost of acquisition for any shares you sell to avoid discrepancies.

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