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Vest share repurchase

Ashok Kelkar (B.Com) (143 Points)

10 December 2014

Dear Friends

The quary is about a Comany VEST shere's in 2012 One Employee sold back to company in OCT 2014

is it a STCG? or Income? for FY 2014-15?

Ashok Kelkar

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Gagan Deep Singh (CHARTERED ACCOUNTANT) (1190 Points)
Replied 10 December 2014

U/S 46A It will be a LTCG if shares are listed on recognised stock exchange.

If Shares are unlisted then it will be exempted in the hands of an employee and the company will be liable to pay additional tax @ 20% on difference between consideration paid for buyback of shares and consideration recieved while issuing shares u/s 115QA.

Please note that as per amendment made in Finance Act(no.2)2014, all unlisted shares if held for less than 36 months then it will be treated as short term capital asset. However in case of listed shares 36 months will be substituted by 12 months.