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Transfer
of
Securities in a Demat form
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Transfer
of Securities in a Demat form
[sec 45(2A)]:-
Where any
person has had any beneficial interest in any security which has been
transferred in the previous year, then any profits/ gains arising from the
sale of such securities shall be chargeable under the head capital gains in the hands of the beneficial owner.
The
Central Board of Direct Taxes
(CBDT) has specifically issued a circular (Circular
no. 768, vide dated 24-06-1998) in relation to taxing of such transfer of securities, the gist of which
is summarized as under:
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S
No.
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Description
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Clarification
I
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The
FIFO
(First In First Out) method shall be applied only in respect of the
dematerialized holdings because in the case of sale of such
dematerialized securities, the securities held in physical form cannot
be construed to have been sold as they continue to be in possession of
the investor with each security separately identifiable;
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Clarification
II
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In
the Depository system the investor can hold multiple accounts, wherein
if securities are sold from multiple accounts then FIFO method will be
applied account wise.
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Clarification
III
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If
in an existing account of dematerialized stock, old physical stock is
dematerialized and entered at a later date, then as per FIFO method, the
acquisition date for stock will be taken as the date on which same was
entered into the demat account.
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PLEASE
NOTE:
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