Accounting & Taxation Issues relating to Capital Market Transactions

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‣ Cost of acquisition in the cases given in sec. 49 such as gift, will etc. will be the cost to the previous owner. ‣ If asset acquired prior to 1.4.81 at the option of the assessee actual cost of acquisitioner or Market value as on 1.4.1981 whichever suits him will be the cost of acquisition . ‣ For determining whether an asset is long term or short term period of holding of previous owner will be considered in cases covered U/s 49 such as gift, will etc. ‣ Indexation of cost of acquisition is to be considered as given in sec. 48 explanation (iii). ‣ Period of holding in the cases covered U/s 49 such as gift, will etc. for indexation of cost of acquisition is disputable. (i) From the date of acquisition of previous owner – Pushpa so far 81 ITDI (ITAT-Chd). (ii) From the date of inheritance – Kishore kanvngo 102 ITD 437 (ITAT-MUM). ‣ Cost inflation index for different years is given below: F.Y. Index F.Y. Index 1981-82 100 1994-95 259 1982-83 109 1995-96 281 1983-84 116 1996-97 305 1984-85 125 1997-98 331 1985-86 133 1998-99 351 1986-87 140 1999-2000 389 1987-88 150 2000-2001 406 1988-89 161 2001-2002 426 1989-90 172 2002-2003 447 1990-91 182 2003-2004 463 1991-92 199 2004-2005 480 1992-93 223 2005-2006 497 1993-94 244 2006-2007 519 ] 2007-2008 551 2008-2009 582
Following are transfer : (i) (ii) Redemption of preference shares – relinquishment 90 Taxman 509 (sec.) Reduction of share capital - Taxable in the hands of shareholder. - 94 Tax man 164 (sec.) - 102 Taxman 66 (sec.) (iii) (P) Conversion of preference shares into equity shares – exchange 102 ITR 248 (AP). OFF MARKET TRANSACTION ‣ These transactions are not made through stock exchange such as buy back, gift etc. ‣ No STT is levied on these transactions. (Q) SECTION 115AC, 115ACA AND 115AD ‣ Section 115AC – Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer. ‣ Section 115ACA – Tax on income from Global depository receipts purchased in foreign currency or capital gains arising from their transfer. ‣ Section 115AD – Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer.
Page 1 and 2: ACCOUNTING & TAXATION ISSUES RELATI
Page 3 and 4: ACCOUNTING FOR CASH MARKET TRANSACT
Page 5 and 6: (A). Derivative Transactions to be
Page 7 and 8: (ii) Rates of STT ‣ STT will be l
Page 9 and 10: (i) (ii) it shall be set off agains
Page 11 and 12: ‣ If there is a loss in daily job
Page 13 and 14: (G) SET OFF WITH COMMODITY TRANSACT
Page 15 and 16: (C ) ALL USUAL BUSINESS EXPENDITURE
Page 17 and 18: (c ) the dividend or income on such
Page 19 and 20: (A) PROFIT OR GAINS ON TRANSFER OF
Page 21 and 22: ‣ Exemption is available to resid
Page 23 and 24: (J)CARRY FORWARD & SET OFF OF LOSSE
Page 25: (N) COST WITH REFERENCE TO CERTAIN

Accounting & Taxation Issues relating to Capital Market Transactions

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