Your Taxes

In the case of equity shares or equity MFs, who will certify the maximum prices of stocks, NAVs of mutual fund as on January 31, 2018 to take grandfathering benefit when I sell? How will the IT department accept any price/NAV I use? Will the government notify share prices and NAVs of thousands of stocks/MFs? How can I maintain records in case I sell after a long period?

Market price of listed securities and NAV of the units of mutual funds as on a particular date is a publicly available information and can be sourced from the respective stock exchange or mutual fund websites. For securities and units acquired prior to February 1, 2018, you may collate and maintain the price information as on January 31, 2018.

Presently, the government has not come out with any certification requirements.

A few months back, my agricultural land situated in an urban area was taken over by the government under the CPWD Act for the six-laning of the existing Delhi-Agra (NH-2). Compensation for the same is going to be released shortly. I am worried about the applicability of LTCG on this takeover of land by the government for a public cause. Please clarify if, under the given circumstances, the proceeds to be received from CPWD will be subjected to LTCG Tax or not.

Transfer of agricultural land (urban area) pursuant to compulsory acquisition is subject to capital gains taxation under Section 45(5) of the Income Tax Act, 1961 (‘Act’). If the said land has been held for a period in excess of 24 months at the time of takeover by CPWD, it would be regarded as a long-term capital asset and the acquisition cost would be eligible for the benefit of indexation.

In case of compulsory acquisition, capital gain would be chargeable in the year in which the compensation is first received. Any enhanced compensation would also be taxable in the year of receipt.

I am a shareholder in a cooperative bank in Mumbai. Kindly let me know whether the dividend received by a shareholder from a cooperative bank is taxable or not, in his hands.

A domestic company is liable to pay dividend distribution tax (‘DDT’) on distributed dividends in accordance with Section 115-O of the Act. Dividends received by an individual up to ₹1,000,000 on which DDT has been paid by the company, is exempt from taxation in the hands of the shareholder. However, a cooperative bank would not be required to pay DDT and, accordingly, any dividend received from cooperative bank is taxable in the hands of the shareholder

The writer is a partner in Deloitte India

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