Shopper's Stop Limited - Securities and Exchange Board of India

In such a case, the cost of such equity shares will not qualify for tax rebate under section 88.
If such equity shares are sold or otherwise transferred within a period of one year from the
date of acquisition, the amount of capital gains on which tax was not charged earlier shall be
deemed to be income chargeable under the head “Capital Gains” of the year in which the
equity shares are transferred.
(b) Under section 54ED of the Income tax Act and subject to the conditions and to the
extent specified therein, long term capital gains on the transfer of the shares of the
Company, after the shares are listed, will also be exempt from capital gains if the
capital gains are invested in equity shares forming part of an eligible issue of capital
as defined above, within a period of 6 months after the date of such transfer.
6. Under section 54F of the Income Tax Act, long term capital gains arising on the transfer of
the shares of the Company held by an individual or Hindu Undivided Family (HUF) shall be
exempt from capital gains tax if the net consideration is utilised, within a period of one year
before, or two years after the date of transfer, in the purchase of a residential house, or for
construction of a residential house within three years. Such benefit will not be available:
If the individual or Hindu Undivided Family-
(i) owns more than one residential house, other than the new residential house, on the date
of transfer of the shares; or
(ii) purchases another residential house within a period of one year after the date of
transfer of the shares; or
(iii) constructs another residential house within a period of three years after the date of
transfer of the shares;
and
(iv) the income from such residential house, other than the one residential house owned
on the date of transfer of the original asset, is chargeable under the head “Income
from house property”.
If only a part of the net consideration is so invested, so much of the capital gains as bears to
the whole of the capital gain the same proportion as the cost of the residential house bears
to the net consideration shall be exempt.
If the residential house is transferred within a period of three years from the date of purchase
or construction, the amount of capital gains on which tax was not charged earlier, shall be
deemed to be income chargeable under the head “Capital Gains” of the year in which the
residential house is transferred.
Under the Wealth Tax Act, 1957:
Shares of the company will not be treated as an asset within the meaning of section 2(ea) of the
Wealth Tax Act, 1957, hence the shares will not be liable to wealth-tax.
Under the Gift Tax Act, 1958 :
Gift of shares of the company made on or after October 1, 1998 would not be liable to Gift tax.
Notes
• All the above benefits are as per the current tax law as amended by the Finance Act, 2004.
• In respect of non-residents, the tax rates and the consequent taxation mentioned above shall
be further subject to any benefits available under the applicable Double Taxation Avoidance
Agreements, if any.
• In view of the individual nature of tax consequences, each shareholder is advised to consult its
own tax advisor with respect to specific tax consequences of its participation in the scheme.
• The tax benefits listed above are not exhaustive.
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