Benefit of lower tax rate under Proviso to s. 112 available to bonus shares despite no indexation

CIT Vs. Anuj A. Sheth HUF (Bombay High Court) The proviso to s. 112(1) provides that “where the tax payable in respect of any income arising from the transfer of a long-term capital asset, being listed securities … exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 48 (i.e. indexation), then, such excess shall be ignored for the purpose of computing the tax payable by the assessee“. The assessee sold bonus shares of Infosys for Rs. 6.13 crores. As there was no cost of acquisition of bonus shares and no indexation, t...