• This conversion is not regarded as transfer and hence no capital gain


There are 2 events

1. Conversion of Debentures into Shares

2. Actual Sale of those Shares

Capital Gain is imposed only on Second event i.e.On Actual Sale of shares



Period of holding will be counted only after the conversion of shares   (NEW AMENDMENT)

Period of Holding will now be counted from Date of Purchase of Debentures (Notification 18/2016 dated 17/03/2016)





  1. Income Tax
  2. Amendments Income Tax for May 2017 Exams
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Davneet Singh
Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 7 years. He provides courses for Mathematics and Science from Class 6 to 12. You can learn personally from here https://www.teachoo.com/premium/maths-and-science-classes/.