Tax Treatment on buyback of shares

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Vineet (Querist)
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06 June 2011 Hi,

I bought 10 shares of Piramal Healthcare in January 2011. Of them, the company bought back the shares 3 shares. The money from the transaction was received to me on 28th Mar, 2011 in my bank account.

I would like to know the tax treatment on the same. Do I need to show it in my income from other sources or pay STCG? Also, what ITR do I need to fill and under what category should I show it? Please advise.

Thanks,
Vineet

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 June 2011 Calculate capital gain in respect of 3 shares.

Sales consideration (amt recd from the company) - Cost of acquisition of 3 shares .
*
It will be treated as short term capital gain and will be shown under the head Capital Gains.
*
Selection of ITR can be done only after knowing your sources of income.

Vineet

Vineet (Querist)
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07 June 2011 Hi Paras, thanks for the reply. My source of income is only salary icome and income from sale of these 3 shares only. Pls advise on ITR.

Also for calculation of STCG, would the acquision cost include brokerage, STT and other charges or only the share price?

Pls advise

Thanks,
Vineet

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 June 2011 You have to file ITR 2.
Do not add STT in the Cost of acquisition.

Vineet

Vineet (Querist)
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08 June 2011 Paras, that means in cost of acquisition, except STT, other charges can be added like Brokerage, Transaction Charges, Service Tax etc? And also pls guide on the ITR to be filled.

Thanks for all your help!

Regards,
Vineet

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 June 2011 In ITR-2
you have to fill up the Schedule CG
Item No A
Sub item No 2(a)
2(b)(i)
2(b)(iv)
2(c)
Others are self explanatory.

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Vineet

Vineet (Querist)
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08 June 2011 Hi Paras,

Can you pls also guide on STCG u/s 111A? What this means and how to proceed for this?
This comes under Item No A Sub item 5.

Thanks,
Vineet

Vineet

Vineet (Querist)
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08 June 2011 Hi Paras,

Can you pls also guide on STCG u/s 111A? What this means and how to proceed for this?
This comes under Item No A Sub item 5.

Thanks,
Vineet

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 June 2011 Fill up Zero against that item as Section 111A is applicable where securities transaction tax is paid while selling the shares. In your case , since it is buy back of shares by the company, STT may not be applicable.

Vineet

Vineet (Querist)
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09 June 2011 Hi Paras,

You have been really helpful to me. Thanks. Last queries.

I entered 0 against STCG u/s 111A. going down below, we need to enter the amount as a breakup under STCG Oth. Now there are 4 dates: upto 15/9, 16/9 to 15/12, 16/12 to 15/3, 16/3 to 31/3. Against which date should I enter the gain?

And lastly, my father suffered from paralytic attack during the current AY, and hence he is unable to sign. I was filling up his ITR online. So while submitting ITRV, can he put his thumb impression, instead of his signature?

Please advise. Thanks a lot.

Regards,
Vineet

Vineet

Vineet (Querist)
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10 June 2011 Hi Paras,

Waiting for your reply. This is the last question. Please reply.

Thanks,
Vineet