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 .
COA
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)
QUESTION 1
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
View answer
Capital gains for original 20000 shares and 3000 bonus shares will be separately calculated
Capital gains for original 20000 shares
| Particulars | Amt |
| Full Value of Consideration | 400000 |
| (20000*20) | |
| Less | |
| Expenses of Transfer | 0 |
| COA | 300000 |
| (20000*15) | |
| COI | 0 |
| Short Term Capital Gain/(Loss) | 100000 |
Capital gains for 3000 bonus shares
| Particulars | Amt |
| Full Value of Consideration | 60000 |
| (3000*20) | |
| Less | |
| Expenses of Transfer | 0 |
| COA | 0 |
| COI | 0 |
| Short Term Capital Gain/(Loss) | 60000 |
Q2
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
View answer
Since shares were purchased before 1/4/1981,we take FMV of Whole 9000 Shares(including bonus shares) as Cost
Cost of Acquistion=9000*40=360000
Indexed Cost of Acquisition=360000*1081/100=3891600
| Particulars | Amt |
| Full Value of Consideration | 4500000 |
| Less | |
| Expenses of Transfer | 0 |
| COA | 3891600 |
| COI | 0 |
| Long Term Capital Gain/(Loss) | 608400 |