In the case of a merger of two equity schemes, is the original investment date considered or the date of merger for calculating capital gains?
- A S Ganesan
I understand that the question is about the holding period of his investments. So in case of a merger of a scheme, the holding period would be considered from the date of his original investment. Both the periods, the holding period before, in the original scheme, and after the merger in the new scheme, are taken into account to calculate the capital gain tax liability. That would also decide if he qualifies for long-term capital gains tax treatment.
More broadly, the incidence of the merger itself does not trigger any capital gains tax liability, and it would arise only when he exits his investments.