Buy Back of Shares

This query is : Resolved

Piyush Agrawal (Querist)
Follow

01 June 2010 A shareholder holding 100 shares of a Listed Company at cost of Rs. 45/- per share

Pursuant to Buyback of Shares by the Company, sold those 100 shares to the Company at Rs. 120/- per share. AND STT IS PAID

He held the shares for a period of 4 years as on the date of Buyback.

Whether the Long Term Capital Gain arising to such shareholder shall be exempt u/s 10?

Or pursuant to delisting of the shares on buy back, considered as Capital Gain on unlisted shares

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

01 June 2010 The said sale will not be exempt u/s 10(38) as STT is not paid on the sale.

The gain will be taxable @ 10% without indexation or 20% with indexation whichever is lower at the option of the assessee.

Message likes : 1 times

Piyush Agrawal

Piyush Agrawal (Querist)
Follow

02 June 2010 sir,
If STT is paid then?
Shall the capital gain be exempt?

And in case of Buyback the shares purchased by the company are STT paid or not

Upgrade to CAclubindia Pro. Subscribe Now!

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

02 June 2010 If STT paid on sale of shares then long term capital gain exempt u/s 10(38)

In case of buyback STT is not paid and hence tax to be paid u/s 112 on the capital gains.