TAX ON BONUS SHARES Original Shares (Long Term) & Bonus Shares (Short Term)

BONUS SHARES CAN CREATE TAX LIABILITY EVEN WHEN YOUR ACTUAL PROFIT IS SMALL!

Bought 100 shares @ ₹1,000 on 08-03-2024
Received 100 bonus shares on 05-06-2025
Market price after bonus: ₹600
Sold all 200 shares @ ₹610 on 24-06-2025

✅ Actual Economic Gain: ₹22,000

✅ Taxable STCG on Bonus Shares: ₹61,000
💰 Tax Payable: ₹12,688

Why? 🤔

Because Bonus Shares have NIL cost u/s 55(2)(aa) and the LTCL of ₹39,000 on original shares cannot be set off against STCG.

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TaxConcept

Tax Concept is a dedicated team of financial writers, legal analysts, and tax professionals committed to breaking down complex Indian corporate updates. From real-time GST amendments and crucial Income Tax judgements to EPFO schemes and corporate law updates, TaxConcept serves as a reliable, authoritative guide for chartered accountants, businesses, and everyday taxpayers seeking absolute compliance clarity.

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