ipos: Unicorn IPOs may bring tax woes for early investors

A grandfathering clause is a provision in tax legal guidelines during which an previous regulation continues to use to some present conditions whereas a brand new rule will apply to all future instances.

Synopsis

Previous to getting listed unicorns need to deliver down the per share worth, in order that small retail traders can take part within the issuance. The one means to take action is to problem bonus shares — a step that is probably not protected underneath the tax legal guidelines and might be handled as recent issuance, say tax consultants.

Mumbai: Among the massive traders in unicorns which might be being listed on the capital markets might face tax problems on the issuance of bonus shares and will find yourself coughing up capital good points tax sans grandfathering profit.

Early traders in unicorns equivalent to Paytm, Mobikwik, Policybazaar and Zomato might face between 10% and 15% tax on the bonus problem of shares.

Traders must cough up hundreds of thousands on their realised good points, say tax

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https://economictimes.indiatimes.com/markets/ipos/fpos/unicorn-ipos-may-bring-tax-woes-for-early-investors/articleshow/84961084.cms | ipos: Unicorn IPOs could deliver tax woes for early traders

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