HDFC had been suspended from trading from 13th July. So you will be getting no margin against them. Once shares of HDFC Bank are credited to your account, you will have to pledge them to get collateral margin.
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Hi Shubh, they are still not visible on Console but can see on the holding page. When will these HDFC Bank shares become visible for us to pledge?
These should be visible on Console now.
What will be the taxation impact on the amount received for the fractional equivalent?
If its taxable, then under which head?
- Capital Gains (if yes then what will be the buy price)
- Income from Other Sources
Or some other way?
Can I get an update on this?
YES …need guidance on this matter if Demat charges are being levied on M&A like hdfc -hdfc bank (hdfc being debited from demat ) and Rights issue ( RE being debited ) @ShubhS9
The consideration of the fractional shares is given in cash or kind.
This will be taxed as capital gains for the shareholder. The buy price can be calculated as the proportionate value of the original purchase price.
Thanks,
Can you help me understand, how can we calculate the proportionate value.
I had 5 HDFC shares with avg cost - 2792, and all of these shares I was holding for more than 1 year.
Q1. How will we calculate the proportionate buy price for the cash amount?
Q2. Will this be a STCG or LTCG?
Hello @Rohit11,
For every 25 shares of HDFC limited, 42 shares of HDFC Bank will be granted.
Going by this ratio, you are entitle to receive 8.4 shares of HDFC Bank in the example stated. You will receive 8 shares but for the remaining 0.4 you will receive cash. The purchase consideration for this 0.4 share will be ₹ 223.36 (2792/5*0.4).
The gains will be considered as LTCG.
Hope this helps!
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Hi @Quicko ,
I tried to check this calculation which is mentioned regarding the purchase consideration for 0.4 share.
I think the purchase cost should be (Value of 1 HDFCBANK share * 0.4)
To calculate value of 1 HDFCBANK share in my case =
(Avg value of HDFC shares / 1.68)
2792 / 1.68 = 1661.9
Purchase cost for 0.4 share = (1661.9 * 0.4) = 664.7
Your calculation mentions = 223.36.
Can you please help in checking what will be the correct way to calculate the purchase price?
I had 1 share of HDFC. 1*42/25 = 1.68 shares - I got 1 share of HDFCBANK, 0.68 fraction shares amount I have not received to my bank yet. How long will it take to get the cash settled.
The credit of amount for fractional shares can take some time. Generally, 30 - 45 days.
What will be the Date and Cost of Acquisition of HDFC Bank shares if the HDFC shares were purchased on multiple dates as given below?
|Date|Stock|Action|Qty|Rate|
|31-Jul-2018|HDFC|Buy|10|1,975.00|
|01-Aug-2018|HDFC|Buy|15|1,977.00|
|08-Aug-2018|HDFC|Buy|10|1,975.00|
|08-Aug-2018|HDFC|Buy|15|1,980.00|
Hi @vivek7
The date on which the shares of HDFC were purchased will be considered as the date of acquisition for those HDFC shares. The cost of acquisition will be calculated on a FIFO basis, meaning, the shares which were purchased 1st will be considered as sold first.
Hi @Rohit11
The calculation mentioned earlier is correct.
The purchase cost for 0.4 shares is calculated on the basis of the purchase cost of HDFC Ltd and not HDFC Bank because the original buy was HDFC Ltd and not HDFC Bank.
Hi @Quicko ,
2792 is the avg purchase price of 5 shares i.e 13960 is total for 5 shares of HDFC.
But Just curious to know as Why did we divide 2792 by 5 then?
Hi @Rohit11
We assumed that 2792 was the total purchase price of 5 shares.
If it’s 13960, then we can calculate using this amount.
Suppose I bought 15 shares of HDFC on day 1 @1900 and 10 shares on day 30 @1800. Now I receive 42 shares of HDFC Bank without any fractional allotment involved. But, going by allocation ratio, the Quantity of HDFC Bank entitilement is 16.8 and 25.2 respectively.
How will FIFO work out if these HDFC Bank shares are sold partially? Say 25 shares are sold.
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