Capital gain
This query is : Resolved
09 February 2018
If the repayment of loan by way of shares will be regarded as transfer and attract capital gain?
Pls clarify.
Pls clarify.
09 February 2018
As per Section 2(47) transfer in relation to a a capital asset includes sale, exchange or relinquishment of the asset.
Hence, it is clear that it will attract capital gain tax
Hence, it is clear that it will attract capital gain tax
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09 February 2018
Thanks for the reply. please clarify if gift of shares held in a pvt ltd will attract capital gain
09 February 2018
Yes you can do so but if you will gift the same to other person then it will become the income of the receiver as Income from Other Sources under the provisions of section 56(2)(vii). Further, you will also need to think about the treatment of loan taken from that party.
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09 February 2018
Thanks for the reply.
Sorry to disturb you. I didn't get "Further, you will also need to think about the treatment of loan taken from that party."
Sorry to disturb you. I didn't get "Further, you will also need to think about the treatment of loan taken from that party."
09 February 2018
Since you have taken loan and in lieu of that you are issuing the shares. Therefore, if you gift the shares then what about the loan. That will still remain outstanding in the books.
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09 February 2018
Understood. Both are different transactions. Anyway thanks for your input.
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