I was wondering…Since the pledging of shares involves moving the shares from an investors demat account to the broker’s demat account, will this change the date of purchase of the said shares for tax calculation purposes. Let me give you an example.
Mr. X purchased 1000 shares of Reliance on 1st January, 2017. He then pledged all the shares on 10th January with Zerodha to get trading margin. He then unpledged the same shares on 2nd February, 2018 (after 1 year) and sold them on 20th February, 2018 on the exchange at a profit of 40%. What will be the classification of the gains made, STCG or LTCG?
Since the shares are moving out of his demat account on 11-01-17 and coming back into the demat account on 03-02-18, what will be his purchase date? Will it be 01-01-17 to claim Long Term Capital Gains and pay no tax or will it be 03-02-18 to claim Short Term Capital Gains and pay 15% tax?
Pledging shares does not alter its purchase date. So purchase date will remain 1 Jan 2017 to claim benefit on LTCG.