Tax on bonus shares (2024)

Taxation
1

Hi, Want to check the latest rules on tax implications on bonus shares.

e.g. I hold Reliance shares @ 2900 since a few months. Currently trading at 2700 and let’s assume it trades at 1350 after bonus.

Can I sell half my shares @ 1350 and book short term loss to compensate with other short term capital gains that I might have?

thanks in advance.

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2

Yes, you can.

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3

Hi @dcd,

You will be able to adjust the short-term losses against your gains. However, there’s a provision under the Income Tax Act that disallows bonus stripping. Under this section if,

  • An investor buys shares within a period of 3 months prior to the record date of the bonus issue AND,
  • The investor sells all or any of the original shares within a period of 9 months after the record date of the bonus issue.

If both the above conditions are fulfilled, you’ll not be able to claim the losses.

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