[aaykarbhavan] Advice on Taxation implication unlisted shares

Dear Sir

Please advice on taxation implication on unlisted shares on the following situation

"A" has acquired the 10000 shares in unlisted company on 05/03/2011 at Face value of Rs. 1000/- in Physical form. In the year 2015 . "A"  has transferred the shares to "B" on 25/09/2015 at Rs.1600/- each. where the Fair Market Value of the shares as on 25/09/2015 was Rs. 2000/- each.

In the above situation, as per my understanding following will be income tax compliance / implication in respect of the above transaction:

Tax impact on Transferor:

Transferor "A" needs pay  LTCG @ 20% on Rs. 7,96,062/- i.e

Sale Consideration                                         (10000*1600)              1,60,00,000

Less: Indexed cost of acquisition (10000*1000*1081/711)             1,52,03,938

                                                                                        LTCG                    7,96,062

Tax impact on Transferee:

Transferee "B" needs pay  income from other sources u/s

56(2) as per applicable tax slabs {10000*(2000-1600)}                      40,00,000

Cost  for acquisition for transferee will be Rs 2000/- per share    

with Date of Acquisition 25/09/2014.

Impact on unlisted company:

Unlisted company needs to furnish the above transaction in Annual Information Report (AIR) u/s285BA

In the light of above, Senior members may please advice income tax compliance /

implication on  Transferor, Transferee and Issuer.

Regards

CA Nimit Jain

011-24643675

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Posted by: jain nimi <ca.nimit@yahoo.co.in>

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