(Querist) 25 December 2020
This query is : Resolved
This is a real case. Mr X ( a grandfather ) died at the age of 88 and before death had made specific will for distribution of movable and immovable property.
He also had stocks and shares of several companies worth rupees two crores approximately at the time of his death. During his lifetime itself he had made specific nominations in the favour of his grandson and the nominations were duly confirmed by the respective companies. And were in the full knowledge of the grandson and other legal heirs.
BUT he had NOT made any will for this financial asset in any manner whatsoever.
AFTER HIS ( Mr. X ) DEATH HIS GRANDSON INFORMED THE COMPANIES ABOUT THE DEATH OF Mr.X.
Based on the already registered nominations the companies opened another account in the name of grandson and transferred all the stocks and shares.
EVERYTHING WAS OKAY AND THERE WAS NO CLAIMANT WHATSOEVER.
ISSUE: The grandson sold shares worth forty lacs out of the two crore. MY questions are as below: (1) Whether the grandson is liable to capital gains tax (2) If yes, then what will be the (a) acquisition and or purchase value (3) Whether the acquisition value will be the same as that which was purchased by Mr.X ( grandfather ) (4) Whether the acquisition value will be "ZERO " (5) Whether the acquisition value will be the market value of the the socks and shares on the date of death of the grandfather
Please also take into account any supreme court judgement involving NOMINATION AS A TRUSTEE , if any HOPE, I am able to make the whole issue abundantly clear
(Expert) 25 December 2020
No error apparent appear in the transactions made by the nominee. Also it is not known that the nominee should distribute to anyothers,including legal heirs.As regards capital gains and taxation get a clarification from our CA Club. Ipso facto no condition that it is liable for diatribution.
(Expert) 26 December 2020
The posting suggests no legal issues. The procedural issue as to liability towards tax on capital gains requires the professional assistance form a Chartered Accountant.
(Querist) 26 December 2020
Thanks for the interest shown , NOW I understand from CA Club source that the Government of India had issued a notification in Feb 2018 that the acquisition value of all past purchase will be taken as market value as on Feb 2018 e.g. original purchase date 1995 Rs 105 per a share , if the Value of the same share as on Feb 2018 is Rs 500 per share , if sale value as on date is Rs 700 per share ; then the capital gain will be 700 minus 500 = 200 and NOT 700 minus 105 , Thanks issue is settled
Dr J C Vashista
(Expert) 28 December 2020
It is better to consult and engage a local prudent chartered accountant / taxation lawyer for better appreciation of facts/ documents, professional advise and necessary proceeding.