Capital Gains
This query is : Resolved
06 May 2008
I have a querry on Capital Gains.
Why should there be a capital gain on sale of Bonus shares by a shareholder, as the bonus is given out of the profits of the Company on which Tax is already paid by the Company, which would result in Double taxing by the Government?
Why should there be a capital gain on sale of Bonus shares by a shareholder, as the bonus is given out of the profits of the Company on which Tax is already paid by the Company, which would result in Double taxing by the Government?
06 May 2008
it is a fixtion of law and it not the bonous share is taxed but it sale proceed is taxable and cost of acq. is nil. pl read two concepts of income tax that is application of income and diversion of income.
can u tell me why there is income on your Fix Deposit interest when it is made out of your taxable income.
can u tell me why there is income on your Fix Deposit interest when it is made out of your taxable income.
07 May 2008
Hello Gautam,
Do u knw that the number of times money multiplies itself, it is taxed that no. of times.
In other words, the no. of times rupee changes hand it comes in the ambit of tax that no. of times.
When a company issues bonus shares, it must have paid tax on its Co.'s profit but not CDT(Corporate Dividend Tax).
Secondly, bonus shares are not taxed at the time of issue. Rather they are taxed in the year in which, you sell those shares to any third person by way of computation of capital gain (considering their cost of acquisition as NIL).
Do u knw that the number of times money multiplies itself, it is taxed that no. of times.
In other words, the no. of times rupee changes hand it comes in the ambit of tax that no. of times.
When a company issues bonus shares, it must have paid tax on its Co.'s profit but not CDT(Corporate Dividend Tax).
Secondly, bonus shares are not taxed at the time of issue. Rather they are taxed in the year in which, you sell those shares to any third person by way of computation of capital gain (considering their cost of acquisition as NIL).
07 May 2008
I AGREE WITH REETIKA.
AS STTED RIGHTLIY , CO.PROFITS MIGHT HAVE ALREADY BEEN TAXED BUT CORP. DIV. TAX IS AVOIDED .AFTER ALL CAPITALISED PROFITS ONLY ARE ISSUED AS BONUS SHARES.
R.V.RAO
AS STTED RIGHTLIY , CO.PROFITS MIGHT HAVE ALREADY BEEN TAXED BUT CORP. DIV. TAX IS AVOIDED .AFTER ALL CAPITALISED PROFITS ONLY ARE ISSUED AS BONUS SHARES.
R.V.RAO
08 May 2008
reetika in ur question on right issue the cost of acquisition in case of right issue will be taken as Re.1 on the no. of shares alloted in right issue and the Capital Gain will be taxable by taking Re.1*No. of shares alloted in right basis.
14 May 2008
MR.PUSHPENDRA , HOW ARE WE SURE THAT F.D IS ALWAYS MADE OUT OF TAXABLE INCOME ?CAN THERE BE AN ASSURED MECHANISM TO ENSURE THAT?
I FEEL NO SUCH MECHANISM IS AVAILABLE NOR CAN BE INVENTD OUR TAX ADMN. BEING WHAT IT IS.
IF THAT BE THE CASE WHY EXEMPT ANY SOURCE OF INCOME FROM TAX, BASED ON PRESUMPTIONS AND ASSUMPTIONS.
NO TAX ADMINISTRATOR CAN AFFORD TO DO THAT IN A DYNAMIC AND DEVELOPING ECONOMY LIKE INDIA .
R.V.RAO
I FEEL NO SUCH MECHANISM IS AVAILABLE NOR CAN BE INVENTD OUR TAX ADMN. BEING WHAT IT IS.
IF THAT BE THE CASE WHY EXEMPT ANY SOURCE OF INCOME FROM TAX, BASED ON PRESUMPTIONS AND ASSUMPTIONS.
NO TAX ADMINISTRATOR CAN AFFORD TO DO THAT IN A DYNAMIC AND DEVELOPING ECONOMY LIKE INDIA .
R.V.RAO
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