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India: Treatment of long-term capital loss; bonus shares

India: Treatment long-term capital loss; bonus shares

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).

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  • Long-term capital loss on sale of listed shares (income from which is exempt from tax) allowed to be carried forward and set-off against other long-term capital gains: The Kolkata Bench of the Income-tax Appellate Tribunal in the case of United Investments held that long-term capital loss arising on the sale of listed shares (income from which is exempt from tax) can be carried forward and set-off against other long-term capital gain. The case is: United Investments v. ACIT. Read a September 2019 report [PDF 231 KB]

  • Provisions do not apply to bonus shares: The Delhi Tribunal held that provisions of section 56(2)(vii)(c) of the Income-tax Act, 1961 do not apply with regard to bonus shares because, concerning bonus shares, there is neither any increase nor decrease in the wealth of the shareholder. Thus, provisions of section 56(2)(vii)(c) do not apply to bonus shares. The case is: Smt. Mamta Bhandari. Read a September 2019 report [PDF 814 KB]

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