What Is The Cost Base Of Bonus Shares?

What is the purpose of issuing bonus shares?

Companies issue bonus shares to encourage retail participation and increase their equity base.

When price per share of a company is high, it becomes difficult for new investors to buy shares of that particular company.

Increase in the number of shares reduces the price per share..

Which company will give bonus share in 2020?

BONUS ISSUESCompany NameProportionEx-Bonus DateSuncare Traders2:106-Mar-2020Narmada Agrobase8:1025-Feb-2020Continental Seeds2:313-Feb-2020Fermenta Biotech2:113-Feb-202095 more rows

How do you avoid tax on stock options?

14 Ways to Reduce Stock Option TaxesExercise early and File an 83(b) Election.Exercise and Hold for Long Term Capital Gains.Exercise Just Enough Options Each Year to Avoid AMT.Exercise ISOs In January to Maximize Your Float Before Paying AMT.Get Refund Credit for AMT Previously Paid on ISOs.Reduce the AMT on the ISOs by Exercising NSOs.More items…

When can we sell bonus shares?

Typically, when shares become ex-bonus, their price falls in the ratio in which bonus shares are issued. However, there is a gap of four to six weeks before the shareholders actually receive their bonus shares. It is only then that the shares can be sold.

Which company gives maximum bonus?

5 Nifty companies announce bonus shares in 2017; highest in 11 yearsDateRatioBPCL01/06/20172Wipro31/05/20171ICICI Bank04/05/201710GAIL (India)22/02/201734 more rows•Jun 7, 2017

Can a shareholder refuse to accept bonus shares?

Once a resolution for the bonus issue has been approved by the general body of shareholders, a shareholder cannot refuse to accept the bonus shares. This flows from principles of corporate democracy, under which as a general rule, the majority decision of the shareholders binds the minority.

Are bonus shares good?

Because issuing bonus shares increases the issued share capital of the company, the company is perceived as being bigger than it really is, making it more attractive to investors. In addition, increasing the number of outstanding shares decreases the stock price, making the stock more affordable for retail investors.

Can I gift shares to my son?

Unlike transfers to spouses, which are free of capital gains tax, any shares handed to children will be classed as a disposal for capital gains tax purposes. … You would need to calculate any gain between the value of the shares when you bought them and their market value when you transfer them to your children.

Can I sell bonus shares?

If a shareholder sells bonus shares in less than one year after the allotment date, he is liable to pay short term capital gain tax on them. Many companies are declaring bonus shares for their shareholders. … If there is a sale of shares by individual the amount could get classified as a short term capital gains.

Do you have to declare shares as income?

You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) shares or other investments. Shares and investments you may need to pay tax on include: shares that are not in an ISA or PEP.

Do stock options count as income?

If you’ve held the stock or option for less than one year, your sale will result in a short-term gain or loss, which will either add to or reduce your ordinary income. Options sold after a one year or longer holding period are considered long-term capital gains or losses.

Which share is best to buy now?

Latest in Today’s PickGateway Distriparks (₹119.7): Buy. … Dishman Carbogen Amcis (₹162.7): Buy. … Hindustan Oil Exploration Company (₹100): Buy. … Index Outlook | Sensex, Nifty 50 face key resistance ahead. … Aptech (₹134.8): Buy. … Cummins India (₹590.4): Buy. … Lumax Auto Technologies (₹115): Buy.More items…

Which company gives highest dividend?

Sr. NoSr. NoCompany NameDividend Payout Ratio (%)1Bajaj Auto66.632GAIL30.643Hindustan Zinc102.444SJVN52.223 more rows•Aug 29, 2020

How share price is calculated after bonus?

To calculate the share price after the bonus issue, the total value of shares before the bonus issue must be divided on the new number of shares. Therefore, the share price after the bonus issue will be $125 ($7,500,000 / 60,000 shares).

Who is eligible for bonus shares?

Who is eligible for bonus shares? Shareholders who own shares of the company prior to the record date and the ex-date set by the company are eligible for bonus shares. India follows the T+2 rolling system for the delivery of shares, wherein the ex-date is two days ahead of the record date.

What is cost of acquisition of bonus shares?

Cost of acquisition of bonus shares is taken as zero hence the capital gain on selling a bonus share is equal to its selling price. Let us take an example to understand the calculation of capital gain tax in case of transfer of bonus shares.

How is cost of bonus shares determined?

Under the India tax regulations, the cost of acquisition is deemed to be ‘nil’ for bonus shares, and the period of holding is computed from the date of allotment of such bonus shares. The cost of acquisition for the ‘original’ shares would be its actual cost.

Do you pay tax on bonus shares?

Taxing bonus shares The gift of shares in recognition of an employee’s performance or long service will generally be taxable in the employee’s hands as employment income. … There should, however, be no national insurance contributions on the gift. The income tax liability will be based on the value of the shares.