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India: Cost of bonus shares is zero for purposes of computing capital gains (tribunal decision)

A tribunal decision concerning cost of acquisition of bonus shares for purposes of computing capital gains.

May 10, 2024

The Bangalore bench of the Tribunal held that the cost of acquisition (CoA) of bonus shares for purposes of computing capital gains is zero, in accordance with the specific provision of the Income-tax Act, 1961 applicable to bonus shares.

The tribunal held that another provision that gives taxpayers an option to use the fair market value (FMV) of a capital asset as of 1 April 2001 as its CoA, if that capital asset was acquired prior to that date, did not apply.

The case is: Zash Traders v. ACIT

Read a May 2024 report prepared by the KPMG member firm in India

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