Shareholders of the amalgamating company
CS Professional Programme Tax Notes
As per section 47(vII), transfer of shares held by ashareholder in amalgamating company is not regarded as “transfer”, if suchtransfer is in consideration of allotment to him of shares in the amalgamatedcompany.
When transfer is exempt, then for computing CG onshares:
Period of holding: period, for which shares in amalgamatingcompany were held by assessee, will be included in computing the period ofholding of shares in amalgamated company.
Cost of acquisition of shares in amalgamated company = costof acquisition of shares in the amalgamating company.
However, if the above 2 conditions aren’t satisfied, thetransfer shall not be exempt and the shareholder shall be liable to CG tax,further if besides shares, bonds or debentures in consideration of suchtransfer is issued, the transfer will not be exempt.