Section 45(2A) - Transfer of beneficial interest in securities

Beneficial interest in securities treated as income of beneficial owner when depository transfers the beneficial interest.

Profits or gains from a depository's transfer of a beneficial interest in securities are taxable as the income of the beneficial owner in the year of transfer; the FIFO method determines cost and holding period where lots cannot be matched. The contract date (broker's note) is the date of transfer for sales if followed by actual delivery and executed transfer deeds, and purchase holding periods are reckoned between the contracting parties once delivery and transfer formalities occur. Indexation for long term assets follows the holding period so determined.