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Capital gain on transfer of shares

Sonal (CA Final) (382 Points)

07 September 2009

One of my friends has transfered the shares which are listed on Nasdaq for 23000 dollars (1000shars x 23$ per share)as on Aug 09. He has got these shares as ESOP for (30cents per share x 1000shares)in march 2007. Please suggest the way by which he can save tax u/s. 54.

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6 Replies

Juzer Sadikot (CA - innovative solutions for Imports and Exports) (1309 Points)
Replied 07 September 2009

Dear Sonal,

Your friend cannot find any place to claim exemption under section 54F as the Capital Assets transfered i.e. Shares listed in Nasdaq, was short term Capital Asset.

Also you need to take care of following;

1) Claim all possible cost in relation to purchase/excercise of rights.

2) Income/Capital Gain is to be considered after converting USD in Rupees as per rule 115 of IT Rules.

3) Claim benefit of Indo-US DTAA for taxes paid in US.

4) Your friend may also require to repatriate such amount in India with in Six months by virtue of FEMA.

Thanks and Regards

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Sonal (CA Final) (382 Points)
Replied 07 September 2009

How it is short term capital asset? Its a long term capital assets as transfered after 12 mths of aquisition(for shares its 12 mths criteria for long term capital asset). almost after 29mths after aquisition....