n NISM Certifications
X NISM Series X
Medium

From which date should the period of holding of equity shares, converted from preference shares, be considered for tax purposes?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    From the date of conversion into equity shares

  2. B

    From the date of application for allotment of preference shares

  3. From the date of acquisition of preference shares

    Correct answer

  4. D

    From the date of application for conversion of preference shares into equity shares

Why this is the answer

According to Section 47(xb) of the IT Act, the period of holding of equity shares acquired through conversion from preference shares is reckoned from the date the preference shares were acquired, not from the date of conversion.

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