Tax on sale of merged equity shares

Income Tax Income from Capital Gains
1

What purchase date is considered for merged shares for calculation of LTCG/STCG? Is it the original purchase date or effective date of merger? For example from recent HDFC merged to HDFC bank,

If 25 shares HDFC Ltd shares purchased in 2019 at Rs.1500/share, got 42 shares of HDFC bank after merged in 2023. If these HDFC Bank shares are sold within one year of merger, which kind of capital gain tax applicable-LTCG or STCG? What is the purchase price and date considered for HDFC bank shares?

2

@CA_Niyati_Mistry if you can help here.

3

Hello @desaipt2003,

The purchase date in case of merger will be the original purchase date.

As per your stated example, if the merged shares are sold within a year of merger it will be considered as LTCG. HDFC Ltd shares were originally purchased in 2019, the period of holding is more than one year hence long term.

Hope this clarifies!

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