Mr. Shivansh purchased 11,000 equity shares of 10 each of M/s ABC Ltd. on 08.03.2007 at a premium of 40 per share. On 07.10.2024, the Company…

Computation of income chargeable in the hands of Mr. Shivansh for A.Y. 2025-26 Amount (₹) (1) On buyback of 1,000 equity shares by M/s ABC Ltd. Capital Gains Full Value of consideration Nil Less: Cost of Acquisition [1000 x 50] 50,000 Long-term capital loss [can be set off against long term capital gain on liquidation of company] 50,000 Income from Other Sources Dividend [1,000 x 550] 5,50,000 The sum paid by M/s ABC Ltd., a domestic company for purchase of its own shares would be treated as dividend and taxable under the head "Income from Other Sources" in the hands of Mr. Shivansh. No deduction for expenses would be available against such dividend income (2) Capital gains chargeable on liquidation Capital Gains Full value of the consideration 62,00,000 Cash (10,000 shares x 100 per share) 10,00,000 Market value of land on the date of distribution 60,00,000 70,00,000 Less: Deemed Dividend [8lakhs (80lakhs/1 lakhs x 10,000), being the share of Mr. Shivansh in accumulated profits of 80lakhs would be deemed as dividend] 8,00,000 Less: Cost of acquisition [10,000 × ₹ 50 (₹ 10+40)] 5,00,000 Long-term capital gain 57,00,000