Hey @RanS
If you purchased the shares more than 3 months ago, the rules for bonus stripping won’t apply to you.
Does it mean that if there’s a loss on the original shares then @RanS can still claim it.
And can wait for the bonus shares to turn into LTCG and pay lower tax. So, bonus stripping amendment still has no effect on the shares held by @RanS
Please, Confirm. Thanks @CA_Jayni_Bhavsar
Hey @S_Gupta
Yes, he can claim the loss on the original shares and can wait for the bonus shares to turn into LTCG. The anti-bonus stripping provisions do not apply in his case.
Hope this helps!
Bonus stripping in India refers to buying units of mutual funds or shares before a bonus is declared and selling the original units at a loss after receiving the bonus. This artificial loss is disallowed for tax purposes under Section 94(8) of the Income Tax Act to prevent tax avoidance.