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Tax on sale of shares by promoters

Mihir Manohar (CA Final - Article Assistant) (474 Points)

19 April 2015

What is the tax treatment for sale of shares by promoters through IPO Offer for sale?

If capital gains, then what is the cost of acquistion? If PGBP, then what expenses can be claimed against the income?

Please explian via interpretation of relevant provision.

Attachment of relevant case laws would be a cherry on the cake.

Thanks.

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2 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 19 April 2015

You will have to check whether the shares are held as a capital asset or as a business asset. If it held as a capital asset (most likely) it will be treated as capital gains.

For more information contact me at capraveenmr @ gmail.com or comment at www.capraveenmr.wordpress.com

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Mihir Manohar (CA Final - Article Assistant) (474 Points)
Replied 19 April 2015

Dear Praveen, Thanks for your response. But how will it be determined whether the asset is a capital asset or business asset in the hands of promoters. I believe in Income tax, matters can only be fought either on interpretation of relevant provision or case laws. Please provide me the link of concerned article if you have written. Thanks.