Tuesday, April 29, 2008

How to give my Igate shares to the Company @ Rs.410/-

This is the question that is in the mind of everyone who is having some Igate shares in his hand. I have been getting this query for the past few days from many sides.

First, to make it clear, If you are selling it to the company @ the exit price, you are not going to pay STT (Service Transaction Tax) and there will be huge tax applicable.

Case 1:
If you are holding the shares for more than a year (Long term capital gains) - 20% on the profit as tax.

Case 2:
If you are holding the shares for less that a year (Short term capital gains) - 30% on the profit as tax.

The better option is to sell directly in the market @ current market price. If you are selling directly in the market, the tax would be zero (Long term) or 15% (Short term). Note there might not be any brokerage if you are selling directly to the company but if you sell in the market there will be brokerage and STT.

For those, who don't want/like to sell in the market for different reasons (Illiquidity, more profit), You will be getting a form from Igate within 6 months asking you to fill the number of shares. Fill the form with the details and the company will send the check worth the amount 410*No. of shares.

You people can be happy as the stock didn't decrease in the recent downturn because of the intrinsic price known to the whole crowd. :-)

Disclosure: I sold the shares in the market when it was around 400.

Happy Investing!!