Tax alert: Long-term capital loss on reduction of share capital, allowable has been saved
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Tax alert: Long-term capital loss on reduction of share capital, allowable
13 March 2024
The Mumbai Bench of the Income-tax Appellate Tribunal has rendered its decision that reduction of share capital amounts to extinguishment of rights on the shares and is a transfer under section 2(47) of the Income-tax Act, 1961. Hence, even if no consideration is received, the computation provisions under capital gains would apply and loss by way of reduction of capital would be allowable as a long-term capital loss.
