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.
Income Tax : Provisions pertaining to bonus stripping and dividend stripping to be made applicable to securities and units Section 94 of the Ac...
Provisions pertaining to bonus stripping and dividend stripping to be made applicable to securities and units Section 94 of the Act contains anti avoidance provisions to deal with transactions in securities and units of mutual fund which, inter-alia, include dividend stripping and bonus stripping. 2. However, the current provisions of sub-section (8) of section 94 […]
