CASH PURCHASE OF SHARES

[NAMAN DOKANIA]

Can mr. A purchase shares of company amounting to rs. 30000/- in cash??

Is there any tax implication on the same with respect to income tax as well as Companies Act 2013

AI Summary

Can You Buy Shares in Cash? Exploring Tax Implications and Legal Formalities under Income Tax Act and Companies Act 2013. A query was raised regarding whether an individual can purchase shares worth Rs. 30,000 in cash and the potential tax implications under the Income Tax Act and the Companies Act 2013. In response, a reference was made to the case Swati Luthra vs. ITO Delhi 2019, where it was determined that there is no legal prohibition on purchasing shares in cash. However, the responsibility to prove the genuineness of such transactions lies with the purchaser, and all legal formalities for the transfer must be properly completed.