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Tax calculation on the gains for un-listed shares

Tax planning 478 views 1 replies

Srinivas

Others

28 Points Joined August 2013

Hi Experts, Please clarify my query: Person-X(Resident of India) purchased the shares of his company-A which is not listed anywhere. And recently Company-B acquired the COmpany-A, and Person-X sold his shares and got the amount from USA. The query is, amount which Person-X gained by selling the shares(which are not listed) is taxable?

If it is taxable is there any way of re-investing and saving the tax?

Few people say we can re-invest it in NHAI or REC bonds or invest in residential house?

Is there any time duration with in tat we have to re-invest? Assume Person-X got the gain on 1st August, 2013, how long he can wait to re-invest to avoid the tax.

If Person-X opt for the Residential House, Can he build a house on already available land or need to buy new house?

Is it ok if the land is on Person-X spouse name and he can construct the house with the gains got from Sellign shares?

Regards

Srinivas

Replies (1)

CA Kumar Mukesh

CA CMA FINAL and Advance Excel Trainer

6886 Points Joined December 2009

This transaction will be taxable under capital Gain Head may be short term or long term in case of period of holding Exceeds one year at the date of transfer of Capital Asset.

To claim Deduction - Should be long term asset & can invested under Section 54 E (investment in NHAI or REC bonds within 6 months from the date transfer)