12 June 2008

Ranbaxy sale – capital gains

Today's Times of India asserts that SEBI and the tax authorities may not allow previously negotiated sale of shares to be executed via the stock exchange as it will escape capital gains (though the transaction will be subject to Securities Transaction Tax - STT). To the best of my understanding, SEBI does not take any views on where a transaction occurs – if at all SEBI would prefer transactions to occur on the exchanges. There is reverse analogy to sponsored ADRs not being given benefit of STT because they don't occur on exchanges.

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