Accounting & Taxation Issues relating to Capital Market Transactions

‣ STT based short term capital loss can also be set off against
other short term capital gain.
‣ No loss under section 74 can be carried forward for more
than 8 assessment years.
(K)
DIVIDEND INCOME IS EXEMPT UK/S 10(34)- Any
expenditure claimed against above income will be subject to
disallowance u/s 14A AJW Rule 8D and notification no. S.O. 547 (E)
dtd. 24.3.08(299) ITR (ST) 88.
(L) TRANSACTIONS NOT REGARDED AS TRANSFER U/S 47
‣ Any transfer of a capital asset under a gift or will or an
irrevocable trust not a transfer, but above does not cover
shares, debentures or warrants allotted by a company
directly or indirectly to its employees under any ESOP or
scheme of the company offered to such employees in
accordance with the guidelines issued by the Central
govt. in this behalf.
‣ Shares given on loan not treated as transfer U/s 47 (XV).
As per guidelines issued by SEBI under SEBI Act, 1992
or by RBI under RBI Act, 1934.
‣ Some other cases mentioned U/s 47.
(M) SPECIAL PROVISION WITH RESPECT TO CAPITAL
GAINS IN THE CASE OF A NON RESIDENT U/S 48
RULE 115A
‣ Benefit of indexation not available in case of long term capital gain on
other than STT transaction.
‣ Provision applicable only for transfer of shares or debentures of an
Indian Company.
‣ Such capital asset must be acquired by utilizing foreign currency.
‣ Assessee is not covered U/s 115AC or 115 AD at the time of transfer of
the asset.
‣ Computation is to be done according to rule 115A.