Convertible preference shares & tax implications under I.T.Act

0
1037
Print Friendly, PDF & Email

Convertible preference shares entitle a holder fixed number of shares after a time. This is the point of time when the taxation issue starts rising. So this post is going to discuss and provide answers to following questions  :

  1. Whether the conversion of preference shares to shares gives rise to capital gains?
  2. How to compute period of holding of shares received on conversion of preference shares?
  3. How are the cost of acquisition of shares on redemption of preference shares determined?
  4. From which date indexation benefit allowed -from date of redemption or from date of original holding of preference shares?
  5. Whether special tax rate u/s 112A applies to long term capital gains on the sale of shares received on conversion of preference shares?

This content is for annual and Semi Annual members only.
Log In Register