Is there any tax implication while making an investment in shares? Are investors in shares entitled to any tax benefits?
There is no tax implication while making an investment in shares. There are tax benefits to investing in some pre-approved companies as mentioned in the third point below. The tax implication arises only at the time of sale of shares as under: If certain eligible equity shares are purchased on or after March 1, 2003 but before March 1, 2004 and are transferred after 12 months, then the gain on the sale of such shares will be entitled for exemption under Section 10(36) of the Income Tax Act, 1961 by eligible equity shares. This applies to any equity shares, which form part of the BSE 500 index of the Bombay Stock Exchange, the transaction of purchase and sale of which have been entered into through a recognised stock exchange in India and any equity shares, allotted through a public issue on or after March 1, 2003 and listed in a recognised stock exchange in India before March 1, 2004 and the transaction of such shares, if entered into through a recognised stock exchange in India. After
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