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TAXATION ON FORFEITURE OF PARTLY PAID SHARE


ONE CLOSELY HELD COMPANY (PVT LTD ) WANTS TO FORFEIT PARTLY PAID EQUITY SHARES .WHAT WILL BE APPLICABLE PROVISIONS ACCORDING TO PRESENT INCOME TAX ACT , WHETHER FORFEITED SHARE WILL BE CAPITAL RECEIPT ? OR REVENUE RECEIPT LIABLE FOR INCOME TAX. PL SHARE VIEWS WITH CASE LAWS .

 

REGARDS



By: PRAVEEN BAGGA
partly paid shares is not a capital asset in the hands of the company and accordingly its transfer by way of forfeiture will not give rise to capital gains to the company. The forfeited shares before forfeiture or there after did not represent trading asset and the gains will not be taxed as business income. Since the definition of income is inclusive and the forfeited amount is nevertheless an income and not exempt under the act, it will be taxed as casual income as other income.

By: ABDUL RASHID DULLOO

Dear Praveen,

Pl see the reply at below link.

Click here

If you have any question, Pl post the same.

Kind Regards
TaxReply.com



By: TAXREPLY.COM
Income from forfeiture of share is taxable in other source head?
And also a question
Income from premium on share issue
What is the treatment in income tax?
Sir Please clear my doubt

By: PRATIK BISWAS



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20 Apr

☑ Monthly | GSTR-3B

GSTR-3B for the m/o Mar 2024 (Monthly Taxpayer - Rule 61) - Either Compulsory taxpayer > 5 cr. or Voluntary taxpayer < 5 cr.

☑ Monthly | GSTR-5A

GSTR-5A for the m/o Mar 2024 [Return by OIDAR Service Providers - Rule 64.]

22 Apr

☑ Quarterly | GSTR-3B

GSTR-3B for the Quarter Jan - Mar 2024 (QRMP Taxpayer < 5 Cr - Rule 61) - Category I States.

* State Category I - Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.

24 Apr

☑ Quarterly | GSTR-3B

GSTR-3B for the Quarter Jan - Mar 2024 (QRMP Taxpayers < 5 Cr - Rule 61) - Category II States.

* State Category II - Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi.

25 Apr

☑ Half-Yearly | ITC-04

ITC-04 for the half year (Oct - Mar 2024) (For taxpayers > 5 Cr. Turnover) - Rule 45.

☑ Annual | ITC-04

ITC-04 for the FY 2023-24 (For taxpayers upto 5 Cr. Turnover) - Rule 45.

28 Apr

☑ Monthly | GSTR-11

GSTR-11 for the m/o Mar 2024 (Statement of inward supplies by persons having Unique Identification Number (UIN)).

30 Apr

☑ Annual | GSTR-4

GSTR-4 (Annual Return) for FY 2023-24 by Composite Taxpayer (Rule 62).

☑ Quarterly | QRMP

Last date for opt-in / opt-out QRMP Scheme for quarter Apr - June 2024 (Rule 61A)