Treatment Shares acquired on Redemption of Global Depository Receipts by Non Resident Assessee

Meaning of Global Depository Receipts

-v- 

Indian Companies shares are listed only on Indian Stock Market (Example Bombay Stock Exchange and National Stock Exchange)

Those Indian Companies who want to allow trading of their shares in Foreign Stock Market get their shares convered into GDR (Global Depository Receipts)

These GDR are purchased or sold by Non Residents

Such non residents can later redeem these GDR and get shares on its behalf

How is Capital Gain Computed on Redemption

No Capital Gain on Redemption of GDR

However, Later if such shares are sold,how will capital gain gets calculated 

Cost of Acquisition of Shares will be Market Price of the shares  on date of request for redemption of such shares is made

(and not the original purchase price of GDR)

Period of holding shall be counted from

date of request for redemption of such shares is made

to

Date of Sale of such shares

Example

GDR were purchased by non residents in 10 April 2012

On 10 May 2015,he gave a request for redemption into shares .His request was accepted on 15 May 2015 and shares were issued to him

Market Price of shares on 10 May 2015 were Rs 125000 and on 15 May 2015 was Rs 140000

Later such shares were sold on 20 June 2015 for Rs 150000