please explain from investor pt of view?

Page no : 2

santhosh (CA) (636 Points)
Replied 06 March 2010

Yeah dont have such a notion its an excellent tax saving event !

Assume you havea STCG of say Rs 500000/ .you cant shell out money for this.. so what do you do?

Try this :

Buy shares of a company which is going to come out with Bonus issue ...After a bonus issue is announced share price will shoot like hell... buy them to an certain extent so that after bonus issue your shares in hand will double and then you should sell (BONUS element) them immdlty after bonus (where the share price Falls rapidly)

Thereby you will incur LOSS (say to an extent of Rs 500000)... Now this can be setoff against your STCG...

But if you notice you dont loose anything acutually you have the original units whose value will increase in a years time and then you can sell to gain and that is LTCG which is exempt from tax

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RADHIKA JALAN (agarwal) (1521 Points)
Replied 06 March 2010

thanx 4 sharing.....................

santhosh (CA) (636 Points)
Replied 06 March 2010

Its my Pleasure...

SIDHARTH DHIR (senior articled assistant) (623 Points)
Replied 07 March 2010

Originally posted by : santhosh
	Yeah dont have such a notion its an excellent tax saving event ! Assume you havea STCG of say Rs 500000/ .you cant shell out money for this.. so what do you do? Try this : Buy shares of a company which is going to come out with Bonus issue ...After a bonus issue is announced share price will shoot like hell... buy them to an certain extent so that after bonus issue your shares in hand will double and then you should sell (BONUS element) them immdlty after bonus (where the share price Falls rapidly) Thereby you will incur LOSS (say to an extent of Rs 500000)... Now this can be setoff against your STCG... But if you notice you dont loose anything acutually you have the original units whose value will increase in a years time and then you can sell to gain and that is LTCG which is exempt from tax