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Bonus shares are shares which an existing share holder gets without paying anything extra.


 When Taxable

In this case capital gain is computed when the bonus shares are actually sold .



Cost of acquisition (COA) of bonus shares is nil (as nothing paid)

However , if these bonus shares are allotted before 1/4/1981,then there Fair Market Value as on 1/4/1981 is to be taken, (even though their actual cost is zero) 



Mr A purchased 20000 shares of 15 each on 10 April 2015
He is allotted 3000 bonus shares on 15 April 2015
He sold all 23000 shares on 15 Oct 2015 @ 20/shares

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Mr A purchased 6000 shares of 10 each on 10 April 1979

He is allotted  3000 bonus shares on 15 April 1980

FMV of shares as on 1/4/1981 was 40/Share

He sold all 9000 shares on 15 Oct 2015 @ Rs 500/shares 

CII for 1981-82 was 100 and 2015-16 WAS 1081

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  1. Income Tax
  2. Income from Capital Gains
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .