Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: cpt :: due date for vat payment :: VAT Audit :: list of goods taxed at 4% :: form 3cd :: Central Excise rule to resale the machines to a new company :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS
Indirect Tax »
 Applicability of TDS provisions of section 194-I of the Income-tax Act, 1961 on lump sum lease premium paid for acquisition of long term lease-regarding
 CBDT seeks monthly data of disposed I-T appeals
 Further indirect tax may be levied in 2017
 India has to make its own tax law
 Centre warns against criticism of GST network
 Indirect tax collection jumps 26% in April-September, direct tax 9%
 Indirect Tax collections up
 Thank you note from income tax department
 Tax dept scanning IDS disclosures filed through post
 Poor management cause of financial pressure on Centre
 GST to have short-lived impact on inflation: RBI

Tax on capital gain depends on time period they are held
March, 24th 2015

There is often an element of doubt about the calculation of the time period for the holding of shares in a company. The time period of the holding is significant because the moment the period crosses a time period of 12 months the asset becomes a long term capital asset and any capital gains that are earned on this have a zero per cent tax rate applicable to it. Thus the investor would want to ensure that their holdings fall into this bracket especially in times of a market rally because this will end up with a lower tax impact.

Demat holdings

One of the questions that investors have is with respect to the manner of calculation of the time period for the holding of the shares. There are cases wherein shares have been bought in a physical form many years ago and then they have been converted into demat form. The shares are sold after this and the question that arises is whether the one year time period should include the time period when the shares were held in physical form or will this just include the demat time period. It could be that the sale of the shares after being converted to demat form has taken place in less than a year and the worry is that this could lead to the individual having to pay tax.

Actual position

The actual position as far as the tax calculations is concerned is that the entire time period of the holding of the shares need to be considered while calculating the time period for which the shares were actually held by the individual. . The process of demat of the shares is just a means of conversion of the manner of holdings of the investment and hence this is not an actual act of purchase or sale. What is important in the process is to actually see which shares have been taken for the purpose of demat. This is possible because for a physical holding there are distinctive certificate numbers that are available. The individual can thus know exactly which are the shares that have been converted in this manner and the time when they were actually purchased and this would make the calculation process easier to undertake.

Distinctive issues

The process of looking at the time period of the holding of the investment is different from the manner in which the shares in demat are to be considered for determining which shares have been sold. The point with respect to the time period of the holding is simple which is that this would have to be taken from the time that they were actually purchased. On the other hand the process of determining which of the shares were actually sold is important to give a cost to the entire holding. This actually helps the individual to distinguish between the various holdings and specifically which of them has been sold. Once this is determined then the individual would have to see the cost for this particular holding and the time when this was actually purchased.

Right calculation

The right calculation and consideration of the details are important so that there is no problem in terms of payment of the taxes on the investment. This is significant as there should not be any confusion in the entire matter and it will ease the entire process for the individual. This can be quite a task especially if the number of holdings is large and there are some more transactions that have been done during the year. Knowing the details would also ensure that the process is completed easily and without any problems.


Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions