A group of friends decided to invest into shares of listed SME company. None of them having enogh fund to purchase a whole lot of shares, so all of them transferred money into one account and purchased a share lot of SME company. In future the lot size might reduce and even it may list on main board. It is possible to transfer shares when the lot size is reduced / shares get listed to main board but it will be considered as off market transaction and STT will not be paid hence it will attract higher tax.
1) Can all of them be considered as joint owner even though shares are not jointly owned i.e. owned by individual demate holder?
2) At the time of selling of shares every one willl get equal shares and it need to be transferred to their individual accounts. Can such amount be considered as expesnes while calculating tax? and others will also treat them as capital gain from listed securities ? In such case AIS/TIS will mismatch and reporting needs to be made.
3) Or is it advisable to tax the whole amount in single account and transfer the balance amount to other joint holder? In such case the book entries will remains in the balance sheets.
Kindly help in this metter as there are many investors who do not have joint demate account and for investment purpose they come together and invest into single name.
CAclubindia
