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T. Banusekar

IN CASE of shares which are purchased cum-bonus and sold ex-bonus, how is the gain or loss to be treated? How will the gain/loss be treated if the shares are purchased cum-dividend and sold ex-dividend?

What would be the position with regard to the units of the mutual fund purchased cum-dividend and sold ex-dividend?

Sharad Hatekar

Reply

In case of securities, if the same is purchased within three months prior to the record date and sold or transferred within three months after such date and the dividend on such securities is exempt, then the loss, if any, arising out of such purchase and sale will be ignored to the extent of the exempt income received by the assessee.

In the case of units of a recognised mutual fund or the UTI, if the same is purchased within three months prior to the record date and sold or transferred within nine months after such date and the income on such units is exempt, then the loss, if any, arising out of such purchase and sale will be ignored to the extent of the exempt income received by the assessee.

Where any person buys any units within three months prior to the record date and such person is allotted bonus units and such person sells all or any of the original units within nine months from the record date while holding all or any of the bonus units, then any loss from purchase and sale of such units shall be ignored.

The loss ignored shall become the cost of acquisition of the bonus units held by the assessee on the date of sale of the original units.

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