Capial gain

Dhawal Mohnot (Practicing) (449 Points)

27 April 2010

Issue of shares at premium by a company ....

Will it attract Capital Gain ?

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4 Replies

Amir (Learner) (4016 Points)
Replied 27 April 2010

HI Bro.,

I m wondering what made u think that way......:)) {Pls don't misunderstand me, just a thought........ nothing else!}

Anywaz,

No issue of shares either at premium or at par or at discount are not treated under Capital Gains.

Simple reason "NO Capital asset is transfered" while a Company issues shares rather asset is created with this issue process.....

{Though their redemption will definately be treated under head Capital gain}

Dhawal Mohnot (Practicing) (449 Points)
Replied 27 April 2010

not a problem at all sir. I und it was silly. But i just wanted to make myself clear rather than to live with this doubt in mind.

I tried going through all the sections possible . Was confident that it wont be the case . But even then wanted to confirm once.

Thanks bhai for the help.

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 27 April 2010

Well explained AMIR...

DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 28 April 2010

since there is no transfer in the hands of company,no capital gain arises.and very much agreed with amir bhai

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