Profit on transfer of shares in pvt ltd company

This query is : Resolved 

12 November 2012 Sir
One of my Clients who transferred his shares for Rs 10 Lakhs in a private limited company acquired by him during 2005-06 for Rs 50000 /. In this connection please advice the taxability of the profit in the hands of the transferor.
RGDS

Kindly note that the cost of acquisition is only Rs 50,000/- (FY 2005-06)and the sale consideration is Rs 10,00,000/-(FY 2012-13)
Thank You

12 November 2012 It is assumed that the transaction of sale is at arm's length.

The indexed cost of acquisition has to be ascertained. Naturally there will be a huge loss under the head LTCG and the said loss has to be treated in the manner laid down in the IT Act, 1961.



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