About Debt and Fractional Entitlements

Income Tax Income from Capital Gains
1

I would like to know, how to file profit from Debt short term Mutual Funds.
Also, the amount I recieved from Distribution of Net Sales Proceeds against Fractional Entitlements pursuant to the Scheme of Arrangements Demerger / Amalgamation of Tata Consumer

*This communication is in furtherance to the Allotment Advice dated February 5, 2024 intimating the credit of equity shares of the Company allotted to you and notification of your fractional entitlement of the shares under the Composite Scheme of Arrangement involving Tata Consumer Products Limited (“TCPL”), Tata Coffee Limited (“TCL”), TCPL Beverages & Foods Limited (“TBFL”), and their respective stakeholders and creditors (referred to as the ‘Scheme’).

This communication serves to inform you about the distribution of net sales proceeds in accordance with your fractional entitlements arising from Amalgamation as part of the Scheme of Arrangements among Tata Consumer Products Limited, Tata Coffee Limited, and TCPL Beverages & Foods Limited applicable in case of shares allotted pursuant to the Amalgamation. Please note that any net sales proceeds related to your fractional entitlement, if any arising from Demerger will be communicated separately.

Pursuant to Clause 20.5 of the Scheme, fractional entitlements have been consolidated and assigned to Axis Trustee Services Limited (“the Trustee”), which holds these shares in trust for TCL members entitled to fractional entitlements. Subsequently, the Trustee sold these allotted shares on the Stock Exchanges. The Company has disbursed the net sale proceeds at the rate of Rs. 20.812 per fraction on March 6, 2024, after deductions for taxes (as applicable) and other relevant expenses, to eligible TCL members in accordance with their respective fractional entitlements.*

2

Hey @Archit,

The taxation on debt mutual funds would depend on when these mutual funds were purchased.

If purchased before 1st April 2023,

  • Short-term capital gains (holding period < 3 years) will be taxable at slab rate,
  • Long-term capital gains (holding period > 3 years) will be taxed at 20% with indexation benefit.

If purchased after 1st April 2023,

  • Both short-term and long-term capital gains will be taxed at slab rates.

Moreover, with regard to cash received from fractional shares, the same will be treated as capital gains.

Hope this helps.

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