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Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing Capital Gain

When an assessee acquires capital asset in the form of shares or stock of a company on :

(a)        Consolidation and division of the share capital of the company into shares of large denomination than its existing shares.

(b)       Conversion of any shares into stock,

(c)        Re-conversion of any stock into shares,

(d)       Sub-division of any of the shares of the company into shares of smaller amount, or

(e)        Conversion of one kind of shares into another kind.

The cost of acquisition if these cases means the cost of acquisition of the asset calculated with reference to the cost of acquisition of the shares or stock from which such asset has been derived.

When Cost can not be Ascertained [Section 55 (3)] in Computing Capital Gain

Where the cost of particular asset, for which the previous owner had acquired the asset, cannot be ascertained, the cost of acquisition to the owner means the fair market value of the asset on the date on which it becomes the property of such owner.

Cost of bonus shares.

The Finance Act 1995 has made a major change in determining the cost of bonus shares to be called “financial asset.” As per new amendment the cost of financial assets allotted to the assessee without any payment and on the basis of holding of any other financial asset, shall be taken as NIL. This amendment has come into effect from assessment year 1996-97. The cost of bonus shares allotted before 1-4-81 is their fair market value as on 1-4-81.


More Topics ... @ ' Capital Gain's

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]
Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain

Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain

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