Liquidation distributions and deemed dividend rules govern capital gains treatment for shareholders receiving company assets. Distribution of assets on liquidation is treated as dividend to the extent of accumulated profits immediately before liquidation, whether capitalised or not, with fair market value on the date of distribution relevant for computing the deemed dividend. The company's distribution on liquidation is not regarded as a transfer, while the shareholder is chargeable under the head Capital Gains, with sale consideration adjusted for any amount assessed as dividend. For shares in a liquidating company, the post-liquidation period is excluded in determining the capital gains holding period.