Documente Academic
Documente Profesional
Documente Cultură
OF
SHARES & SECURITIES
BY
Rajesh B. Yadav
SHARES & SECURITIES
A. Shares B. Securities
S. 2(46) of Companies Act Securities–S. 2(h) of SCRA
Equity & preference – Pvt. includes shares, scrips, debenture,
stock, bonds
or public-listed or not. Derivative
Bonus, Rights, Split, Stock Government securities
Instruments declared by Cen. Govt.
Rights or interest in securities
Not defined
Commercial man
Acc. Principles
Brokerage
Stamp duty
Legal charges
Service tax
Insurance
Private placement funding
Difficulty due to
exemption u/s 10(34),
10(35)
S. 48 COA
One view Other view
Com & Acc. principle
Revenue nature
not defined
Subsequent payment &
exp. for acquisition cost
Concept
Depository
DP
DRF
S. 45(2A)
Beneficial Owner only-FIFO Method
Applicability to a dealer
Circular No. 768
Overrides S. 45(2A) as also Cir. No. 704
EOF
Investment in equity shares
50% of total proceeds – Proceeds ?
Shares of domestic company
Specified u/s 10(23D)
Annual average of monthly average
Date of determination not clear
Payment of STT
Capital asset
Equity Shares
Units of EOMF
STCA
10% of gains + SC + EC
STT not deductible
Other deductions possible
Rebate
Exclusion from Rs. 5,00,000/- GTI
Losses
Option not to set-off
Whether set-off of other losses possible
Cir. No. 721 dated 31.09.1995
Script wise calculation
Whether STCL can be set-off
Nature of Tax
Effective date
Applicability
Shares of & EOMF
‘Shares’ & ‘Securities’ excluded
Transaction on a recognized stock exchange
Transactions excluded
Delivery and Non Delivery
Purchase and/or sales
Persons covered
June 14, 2009 Rajesh
CREDIT / REBATE FOR STT
88E w.e.f. A.Y. 2005-06
Possible for ‘Business Income’
Equivalent to STT paid
Credit not exceeding I.Tax on STT income
Average rate of tax & s.2 (10)
Evidence with Return of Income
No refund and c/f possible
Set-off against tax on other income
STT on purchase eligible
Difficulties in case of Rajesh
common business
June 14, 2009
RIGHT ENTITLEMENTS
DOA-Date of offer
Dhun Kapadia’s case
COA-Nil-Unless acquired from market
Merges into right shares
RIGHT SHARES
DOA-Allotment-Indexation also
COA -Amount actually paid
COA of entitlement if any
Concept
Controversy settled
S. 2(22) and S. 46A
Proceeds are sale consideration
Other provisions to apply
Applicability to dealer
Whether transfer
Exemption vide S. 47(vii) on compliance
POH-Old period to be included
COA-Old COA
Substitution of FMV possible
Indexation
Does not apply to dealer
Concept
Transfer
Effect of transfer
Concept
Mrs. A Ghosh’s decision
Exemption vide S. 47(x)
DOA-of allotment of shares
COA-proportionate-historical
Indexation - from the date of allotment
Disparity between date and cost of acquisition
Concept
Instruction No. 225 dated 12.08.1996-Interest
Position of buyer from market
Position of seller following accrual method
Appropriate course of action
Cir. No. 2/2002 dt. 15.2.2002
Press Release dt. 20.3.2002-Prospective
No benefit of indexation
Illusionary benefit and s. 112
Continuation of benefit on becoming a resident
Exemption for filing Return of Income
Option to opt out
Possible to apply for combination
LTCG on non-specified asset
LTCG at 20%
Threshold exemption for individual and HUF
Set-off of losses mandatory
Special concession under proviso
10% tax on LTCG – listed securities or units
Computation without indexation
Whether optional – simultaneous calculation
Right to set-off losses on securities and units
M. Ramanlal. 3 ITD 122 (Ahd)
Nimesh S. Shah, 36 BCAJ 645 (Mum)
Nature of operations
Volume , Frequency
Delivery
STT