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No tax concession on gains in Satyam open offer
March 16, 2009 09:40 IST
No tax concession will be available to those Satyam [Get Quote] shareholders who will be selling their shares after the open offer is made by a strategic investor in the fraud-hit IT firm, official sources said.
"There is no case for tax concessions to be given to Satyam shareholders as is being aired in certain quarters," the sources said.
The question of tax concession arises only in the case of short-term capital gains, as a long-term holder of Satyam shares would, in fact, be incurring loss, as the scrip plummeted after the company's disgraced founder Ramalinga Raju confessed to fudging of accounts.
Since the gains would be made only in case of those who would have bought the shares recently, the sources said such shareholders would have to be taxed, as they made a killing in the stock market.
About long-term shareholders, who would be holding the scrip for more than a year, the question of tax does not arise at all since they would in fact be making losses, the sources added.