The Bangalore bench of the Tribunal recently made a significant ruling regarding the computation of capital gains for taxpayers; the Cost of Acquisition (CoA) of bonus shares, for the purpose of calculating capital gains, is zero.
This decision aligns with a specific provision outlined in the Income-tax Act, 1961, which is applicable to bonus shares.
Additionally, the Tribunal clarified that another provision, which allows taxpayers to utilise the Fair Market Value (FMV) of a capital asset as of 1 April, 2001, as its CoA if the asset was acquired before that date, does not apply in the case of bonus shares.
