[Section 49(2)] Transfer of Shares of amalgamating company in place of shares of amalgamated company in case of amalgamation
Any transfer of shares of amalgamating company in place of shares of amalgamated company is not liable to capital gain. Such transaction shall have following tax impact:
Cost of shares in amalgamated company: Cost of shares in amalgamating company shall be deemed to be cost of shares in amalgamated company.
Determination of nature of assets: Period of holding shall be calculated from the date when shares in amalgamating company were acquired.
Indexation Benefit: Indexation benefit shall be available from the year in which shares of amalgamated company were acquired by assessee.
[Section 49(2A)] CONVERSION OF DEBENTURES INTO SHARES
Conversion of debentures into shares are not treated as transfer.
Cost of Acquisition of new asset: Cost of old assets (debentures) shall be taken as cost of acquisition of new assets (converted shares).
Holding Period : Start from the date of acquisition of such debentures.
Indexation benefit : Indexation shall be available from date of allotment of new assets (converted shares)
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