#Bonus Stripping

Bonus Stripping under Income Tax refers to the practice of exploiting tax rules to reduce tax liability on capital gains from the sale of shares or mutual fund units. This description highlights the concept of bonus stripping and its implications for taxpayers. It emphasizes the provisions under the Income Tax Act that discourage this practice, such as disallowing the set-off of losses incurred through bonus stripping. Understanding the rules and regulations related to bonus stripping is crucial for taxpayers to ensure compliance and avoid penalties.