• 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

 

Imporant

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)

EARLIER

Conversion of Debentures into Shares - Special Cases

NOW

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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 GST and Tax E-filinf training in Delhi. Register now.