InvestorQ : I have dematerialized shares. Will it impact my capital gains?
Rutuja Nigam made post

I have dematerialized shares. Will it impact my capital gains?

Answer
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sarah Leo answered.
2 years ago


No, not at all. Dematerialization is only changing the form of holding from physical to electronic. It does not change the date of purchase and the date of demat is not the date of purchase. Your capital gains will still be calculated based on your date of purchase and not your date of demat. The date of dematerialization will not impact your capital gains in anyways. The date of purchase will still be the date of physical purchase only. So you do not have to worry about LTCG being STCG or anything like that.
Irrespective of whether the demat gets done or not, your corporate actions like bonuses, splits, dividends will all continue as it is without any change. The entire process can take close to a month but you first need to check that the shares are transferred into your name. The transfer-cum-demat (TCD) facility is no longer applicable now. So first transfer the shares into your name before dematting. Regarding capital gains, if you bought shares on April 01st, 1996 in physical form and if you dematerialized on May 02nd, 2008 then your date of purchase will still be 1996 only although while calculating the capital gains, the First in First out (FIFO) methodology will be applied based on the date of demat and not the date of purchase.