• 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)


Conversion of Debentures into Shares - Special Cases



  1. Income Tax
  2. Income from Capital Gains

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.