Need Expert Advice?Our Gurus Can Help

Hardik Parikh |106 Answers |Ask -Follow

Tax, Mutual Fund Expert - Answered on Jul 27, 2023

Hardik Parikh is a chartered accountant with over 15 years of experience in taxation, accounting and finance.
He also holds an MBA degree from IIM-Indore.
Hardik, who began his career as an equity research analyst, founded his own advisory firm, Hardik Parikh Associates LLP, which provides a variety of financial services to clients.
He is committed to sharing his knowledge and helping others learn more about finance. He also speaks about valuation at different forums, such as study groups of the Western India Regional Council of Chartered Accountants.... more

Question by Rakesh on Jul 25, 2023Hindi

Hello Sir, How to show the merger of shares in ITR, like I had shares of Midtree which was later merged with LTI and formed a new merged company named LTI Mindtree. Kindly help in this case, how to show in ITR. Rgds Rakesh

Ans: Hello Rakesh,

I understand your query regarding the merger of shares and how to reflect it in your Income Tax Return (ITR).

When a merger happens, the shares of the merging company (in your case, Midtree) are usually exchanged for shares in the merged company (LTI Mindtree). This is generally treated as a transfer of capital assets, and the resulting capital gains or losses need to be reported in your ITR.

Here's a simplified explanation:

1. Cost of Acquisition: The cost of acquisition of the original shares (Midtree) becomes the cost of acquisition of the new shares (LTI Mindtree).

2. Period of Holding: The period for which you held the original shares is included in the period of holding of the new shares. This is important for determining whether the gains are short-term or long-term capital gains.

3. Capital Gains: If you sell the new shares, the capital gain or loss is calculated based on the selling price and the cost of acquisition (which is the cost of the original shares).

Remember to report these details in the appropriate section of your ITR (usually under the head 'Capital Gains').

Please consult with a tax advisor or chartered accountant to understand the specifics as per your individual situation. This is a general explanation and the actual process may vary based on various factors.

I hope this helps!

Best Regards.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

MoneyReply

You may like to see similar questions and answers below

Anil Rego |340 Answers |Ask -Follow

Financial Planner - Answered on Aug 29, 2022

Question by MADANLAL - Aug 29, 2022Hindi

I am regular Rediff reader. Sir, 1) I am earning through share trading, my income is up to 5 lakh. Please advise which ITR form I have to file. 2) And if my income is with salary and share trading up to 5 lakh, then which ITR form I have to file.

Ans: In both the cases you can use ITR 2 to file your tax returns.

ITR 2 is used to file tax when you have income from salary, income from house property, income from capital gain and loss (in your case shares), foreign income, etc.

(more)

Money1