I held Tata Motors DVR shares. What are the Key details I should know about the exchange process and its implications?

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What will I receive in exchange for my Tata Motors DVR shares?

As part of the Capital Reduction Scheme, effective from September 1, 2024, for every 10 DVR shares held, you will receive seven ordinary shares. The trust set up by Tata Motors sold part of these shares to cover tax obligations, and the remaining shares and cash entitlements were distributed to you.

How should I record this transaction in MyGeojit?

For example, you have 100 Tata Motors DVR shares,

Transaction details to be updated in MyGeojit:

Transaction	Date	Share	Quantity	Rate
Sell	01.09.2024	TATA MOTORS DVR	100 Shares (Example)	Your Actual Purchase Cost
Buy	01.09.2024	TATA MOTORS	70 Shares (Example) (Actual shares received by your in exchange of your DVR shares)	1110.35/ share (Fair Market Value)

What is the cost of acquisition for the new shares received?

The cost of acquisition for the new Tata Motors shares is Rs. 1,111.35 per share, based on the market value as of September 1, 2024.

How is the Holding Period for Capital Gain Tax calculated?

The holding period starts from September 1, 2024, which determines whether the gains are classified as short-term or long-term.

Are there tax implications for this exchange?

Yes, Capital Gain Tax applies based on the cost of acquisition and holding period. Deemed dividends are also subject to tax.

What happens if I was entitled to fractional shares? 

Fractional entitlements will be settled in cash as per the terms of the scheme. 

How is the deemed dividend calculated and communicated?

Tata Motors will calculate the deemed dividend based on their accumulated profits as of August 31, 2024. The company will notify you of the deemed dividend, apply the necessary TDS, and issue a TDS certificate for your tax filing.

Note :
The company has published a FAQ on the same. Click here to know more.