I am a senior citizen aged 72 years, based in Calcutta ,Engineer by profession, retired voluntarily about 17 years back from a very well known MNC. I had started buying shares about 30 years back, applying for new shares, also from the market and availed of the bonus shares or special offers from my holdings.My holding includes from my erstwhile company which had offered their shares to their employees too. I have small /medium holdings in about 50 active companies,mostly big corporates and apart from a very few, are actively traded. The problem has arisen now that I have decided to offload my shares due to advancing age and indifferent health. I seem to have misplaced my dates of purchases of most of the holdings. For capital gains calculations one requires the dates of purchases. I believe there is a cutoff date 31.01.2018 which is taken as the date of purchase for very old share purchases. My query ,what does very old share purchases mean, 10/15/20 years or more? Are there any other method for this purpose? If there be any pl elucidate. Will communicating with the share depts or the share managing associates of these 50 companies help,although it will be tedious and time consuming. Awaiting your advice eagerly.

Ans: I understand that you have sold listed shares and all corporate actions took place before 31st January 2018, hence capital gain earned after such date will be taxable.

For example: Today you hold 100,000 shares of that company, FMV as on 31st January 2018 is Rs 200 and today if you transfer 10,000 shares through recognised stock exchange at shares Rs 300, Capital gain of Rs 10,00,000 will be taxable on FIFO basis.

You have to show such gain in 112A schedule (acquired before 31st January 2018) under the Schedule CG.

Ans: As per Indian Income Tax laws, when you inherit shares from your father, the cost of acquisition of such shares will be deemed to be the cost at which your father had acquired these shares. This cost is commonly known as the 'cost of acquisition' or 'purchase price'.

So, to answer your first question, you can use the price at which your father had purchased the shares as your purchase price.

Regarding your second question, the period of holding of the shares will be counted from the date of acquisition by your father. Hence, if the shares were purchased by your father 15-20 years back, and you sell them after holding them for more than 1 year from the date of inheritance, you would be eligible for long-term capital gains tax benefits.

Regarding your third question, if the purchase value of shares is not known, then the cost of acquisition for the purpose of computing capital gains will be the fair market value (FMV) of the shares as on 31st January 2018, which was the date of introduction of the tax on long-term capital gains on equity shares. This FMV will be considered as the cost of acquisition for the purpose of calculating capital gains.

It is important to note that if you sell shares within one year of acquisition, you would be liable to pay short-term capital gains tax on the profits made, whereas if you sell shares after one year of acquisition, you would be liable to pay long-term capital gains tax on the profits made. The tax rate for long-term capital gains tax on equity shares is currently 10% (if the gains exceed Rs. 1 lakh in a financial year) without indexation benefit or 20% with indexation benefit.

Ans: It will difficult to calculate the capital gains if the purchase price is not available. Do not sell everything in the same financial year then you may be exempt and capital gains may be below 1 lacs. Again everything is on assumption.

Please take your CAs advice before moving ahead.