How to calculate cost of acquisition of bonus shares?
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As per Section 55(2)(aa)(iiia):"In relation to a capital asset being a financial asset, being a share or any other security allotted without any payment and on the basis of holding of any other financial asset, the cost of acquisition of such asset shall be taken to be nil." In simple terms, if youRead more
As per Section 55(2)(aa)(iiia):“In relation to a capital asset being a financial asset, being a share or any other security allotted without any payment and on the basis of holding of any other financial asset, the cost of acquisition of such asset shall be taken to be nil.”
In simple terms, if you are allotted bonus shares, the law treats their cost of acquisition as zero.
Capital Gains Computation on Sale of Bonus Shares:
✅ Cost of Acquisition = ₹0
(as per Section 55(2)(aa)(iiia))
✅ Capital Gains = Full Sale Price – ₹0 = Full Sale Price
If the bonus shares are sold, the entire sale consideration becomes the capital gain since no cost was incurred to acquire them.
Tax Implication: