Deemed capital gains: previously non taxed exchange gains on membership allotted shares become taxable when those shares are sold within three years.

Where shares allotted in exchange for membership of a recognised stock exchange are transferred within three years of the original transfer, profits and gains not charged under section 45 by virtue of clause (xi) of section 47 are deemed to be income chargeable under the head Capital gains in the previous year in which those shares are transferred.

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