How many questions come from Chapter 13 (Tax Provisions for Special Cases) in the NISM Series X-B exam?

The workbook gives marks by module; shared over the module's chapters by length, this chapter is worth about 3 of the 150 marks, across MCQs and case studies.

Is there negative marking in NISM Series X-B?

Yes — 25% of the marks of a question is deducted for a wrong answer (0.25 on a 1-mark MCQ, 0.50 on a 2-mark case question), so leave a question blank when you cannot eliminate options.

Where can I practise NISM Series X-B Chapter 13 questions for free?

Aumsetu's free X-B mock test has an untimed chapter-wise practice mode with an explanation after every question, in English and Hindi, plus ten full-length timed mock tests.

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NISM Series X-B · Chapter 13: Tax Provisions for Special Cases

विशेष मामलों के कर प्रावधान · NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination

~3 of 150 marks 90 MCQs + 6 case studies · 150 marks · 3 hours · 60% to pass · −25% of a question's marks per wrong answer 20 practice questions in our bank + 1 case study

What this chapter covers

How corporate actions and fund events are taxed — bonus shares, splits and consolidation, buybacks, rights, mergers, securities lending, conversion of preference shares, segregated portfolios, and consolidation or winding up of mutual fund schemes — with annexures on slab rates, surcharge, cess, exemptions and the cost inflation index.

विशेष मामलों के कर प्रावधान — बोनस, स्प्लिट, बायबैक, राइट्स, विलय, स्टॉक लेंडिंग और म्यूचुअल फंड योजनाओं का विलय।

What to master before the exam

Bonus shares cost nil and are held from allotment: in the workbook example the original shares give long-term gains (12.5% above Rs 1.25 lakh) while the 11-month-old bonus shares give short-term gains at 20%.
Splits and consolidations are not transfers: the cost is apportioned (1,000 shares at Rs 150, each split into two ⇒ Rs 75 each) and the holding period runs from the original purchase.
Buyback from 1 October 2024: proceeds are taxed as dividend and the cost becomes a capital loss (500 shares at Rs 125 ⇒ Rs 62,500 of dividend); before that the company paid 20% plus surcharge and cess.
Renounced rights entitlements have nil cost and give short-term gains at slab rates; amalgamation, preference-to-equity conversion, securities lending and consolidation of similar MF schemes are not transfers — cost and holding period carry over.
Segregated portfolio cost = original cost × NAV of the segregated assets ÷ NAV of the whole portfolio (Rs 15,000 × 2/12 = Rs 2,500); the annexures give the old and new slabs, surcharge, 4% cess and the CII (2001-02 = 100, 2024-25 = 363).

Exam tip: Part of Module 9 (20 marks). Corporate-action questions test cost and holding period — ask "is it a transfer?" and "when does the holding period start?". Keep the annexure slab and CII tables at hand for computations.

Sample questions from this chapter

Five of the 20 questions in our free bank. Open the answer to see the explanation — every question in the mock test has one, in English and Hindi.

Question 1

Which statement about bonus shares held as capital assets is correct as per the workbook?

पूंजीगत परिसंपत्ति के रूप में धारित बोनस शेयरों के बारे में workbook के अनुसार कौन-सा कथन सही है?

The FMV of bonus shares on the allotment date is taxed as income from other sources in the year of allotmentआवंटन की तिथि पर बोनस शेयरों का FMV आवंटन के वर्ष में अन्य स्रोतों से आय के रूप में कर-योग्य है
The period of holding of bonus shares is counted from the date of acquisition of the original sharesबोनस शेयरों की धारण अवधि मूल शेयरों के अधिग्रहण की तिथि से गिनी जाती है
The cost of bonus shares is the average cost of the original sharesबोनस शेयरों की लागत मूल शेयरों की औसत लागत होती है
No tax arises on allotment; on transfer, the period of holding is reckoned from the date of allotment of the bonus sharesआवंटन पर कोई कर नहीं लगता; transfer पर धारण अवधि बोनस शेयरों के आवंटन की तिथि से गिनी जाती है

Show answer & explanation

Answer: D — No tax arises on allotment; on transfer, the period of holding is reckoned from the date of allotment of the bonus shares
No tax implication arises for the company or the shareholder at allotment of bonus shares; gains are computed only on transfer. The period of holding is reckoned from the date of allotment of the bonus shares, and their cost is nil (subject to the 01-04-2001 and 31-01-2018 rules).
बोनस शेयरों के आवंटन पर न कंपनी पर और न शेयरधारक पर कोई कर प्रभाव होता है; लाभ की गणना केवल transfer पर होती है। धारण अवधि बोनस शेयरों के आवंटन की तिथि से गिनी जाती है, और उनकी लागत शून्य होती है (01-04-2001 और 31-01-2018 के नियमों के अधीन)।

Question 2

Mr. Harish bought 6,000 shares of a listed company on 01-05-2021 at Rs. 150 each. The company issued bonus shares in the ratio 1:3 (one bonus share for every three held), allotted on 01-10-2023. On 01-08-2024 he sold all 8,000 shares on the stock exchange at Rs. 210 each, paying STT. His total income is below Rs. 50 lakh, so no surcharge applies. Using the workbook’s rates, what is the tax on the gain from the bonus shares, including 4% health and education cess?

श्री हरीश ने 01-05-2021 को एक सूचीबद्ध कंपनी के 6,000 शेयर रु. 150 प्रति शेयर पर खरीदे। कंपनी ने 1:3 (हर तीन शेयर पर एक बोनस शेयर) के अनुपात में बोनस शेयर जारी किए, जो 01-10-2023 को आवंटित हुए। 01-08-2024 को उन्होंने सभी 8,000 शेयर स्टॉक एक्सचेंज पर रु. 210 प्रति शेयर पर बेचे और STT चुकाया। उनकी कुल आय रु. 50 लाख से कम है, अतः कोई surcharge नहीं लगता। workbook की दरों से, बोनस शेयरों के लाभ पर 4% health and education cess सहित कर कितना है?

Rs. 84,000रु. 84,000
Rs. 87,360रु. 87,360
Rs. 54,600रु. 54,600
Nilशून्य

Show answer & explanation

Answer: B — Rs. 87,360
Bonus shares = 6,000 ÷ 3 = 2,000, cost nil. Held from 01-10-2023 to 01-08-2024 (not more than 12 months), so STCG = 2,000 × 210 = Rs. 4,20,000, taxed at 20% under Section 111A = Rs. 84,000. Add 4% cess: 84,000 × 1.04 = Rs. 87,360 (surcharge is nil up to Rs. 50 lakh per the annexure).
बोनस शेयर = 6,000 ÷ 3 = 2,000, लागत शून्य। 01-10-2023 से 01-08-2024 तक (12 महीने से अधिक नहीं) रखे गए, अतः STCG = 2,000 × 210 = रु. 4,20,000, धारा 111A के अंतर्गत 20% पर कर = रु. 84,000। 4% cess जोड़ें: 84,000 × 1.04 = रु. 87,360 (annexure के अनुसार रु. 50 लाख तक surcharge शून्य है)।

Question 3

In the case of Mr. Harish above (6,000 original shares bought on 01-05-2021 at Rs. 150, sold on 01-08-2024 at Rs. 210 on the exchange with STT paid; no other long-term capital gains), what is the tax on the gain from the 6,000 original shares, before surcharge and cess?

ऊपर के श्री हरीश के मामले में (01-05-2021 को रु. 150 पर खरीदे गए 6,000 मूल शेयर, 01-08-2024 को एक्सचेंज पर STT चुकाकर रु. 210 पर बेचे गए; कोई अन्य दीर्घकालिक पूंजीगत लाभ नहीं), 6,000 मूल शेयरों के लाभ पर surcharge और cess से पहले कर कितना है?

Rs. 29,375रु. 29,375
Rs. 45,000रु. 45,000
Rs. 72,000रु. 72,000
Nilशून्य

Show answer & explanation

Answer: A — Rs. 29,375
The original shares are held for more than 12 months, so LTCG = 6,000 × (210 − 150) = Rs. 3,60,000. Under Section 112A, tax = (3,60,000 − 1,25,000) × 12.5% = 2,35,000 × 12.5% = Rs. 29,375. As in workbook Example 1, original and bonus shares are computed separately.
मूल शेयर 12 महीने से अधिक रखे गए, अतः LTCG = 6,000 × (210 − 150) = रु. 3,60,000। धारा 112A के अंतर्गत कर = (3,60,000 − 1,25,000) × 12.5% = 2,35,000 × 12.5% = रु. 29,375। workbook के उदाहरण 1 की तरह मूल और बोनस शेयरों की गणना अलग-अलग की जाती है।

Question 4

Ms. Asha was allotted bonus shares of a listed company in 2016. The FMV of the shares on 31-01-2018 was Rs. 400 each. She sells them on the stock exchange in 2024 at Rs. 350 each, paying STT. For computing LTCG under Section 112A, what is the cost of acquisition per bonus share?

सुश्री आशा को 2016 में एक सूचीबद्ध कंपनी के बोनस शेयर आवंटित हुए। 31-01-2018 को शेयरों का FMV रु. 400 प्रति शेयर था। वे 2024 में इन्हें स्टॉक एक्सचेंज पर रु. 350 प्रति शेयर पर STT चुकाकर बेचती हैं। धारा 112A के अंतर्गत LTCG की गणना के लिए प्रति बोनस शेयर अधिग्रहण लागत कितनी है?

Nilशून्य
Rs. 350रु. 350
Rs. 400रु. 400
Rs. 375रु. 375

Show answer & explanation

Answer: B — Rs. 350
Cost = higher of (a) actual cost (nil) and (b) lower of the FMV on 31-01-2018 (Rs. 400) and the sale consideration (Rs. 350). Lower of 400 and 350 = Rs. 350, which is higher than nil, so cost = Rs. 350 and the LTCG is nil — the same logic as the workbook’s Bonus-shares caselet.
लागत = (a) वास्तविक लागत (शून्य) और (b) 31-01-2018 के FMV (रु. 400) तथा विक्रय प्रतिफल (रु. 350) में से कम — इन दोनों में से अधिक। 400 और 350 में से कम = रु. 350, जो शून्य से अधिक है, अतः लागत = रु. 350 और LTCG शून्य — workbook के Bonus-shares caselet जैसा ही तर्क।

Question 5

For bonus shares allotted to an assessee before 01-04-2001, what may be taken as the cost of acquisition?

01-04-2001 से पहले किसी करदाता को आवंटित बोनस शेयरों की अधिग्रहण लागत क्या ली जा सकती है?

Always nilहमेशा शून्य
The face value of the bonus sharesबोनस शेयरों का अंकित मूल्य (face value)
The fair market value as on 01-04-2001, at the option of the assesseeकरदाता के विकल्प पर, 01-04-2001 को उचित बाज़ार मूल्य
The FMV on the date of allotment of the bonus sharesबोनस शेयरों के आवंटन की तिथि पर FMV

Show answer & explanation

Answer: C — The fair market value as on 01-04-2001, at the option of the assessee
Bonus shares allotted without payment have a nil cost, but if they were issued before 01-04-2001, the fair market value as on 01-04-2001 can be taken as the cost of acquisition at the option of the assessee.
बिना भुगतान के आवंटित बोनस शेयरों की लागत शून्य होती है, किंतु यदि वे 01-04-2001 से पहले जारी हुए हों, तो करदाता के विकल्प पर 01-04-2001 का उचित बाज़ार मूल्य अधिग्रहण लागत लिया जा सकता है।

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All X-B chapters

1. Basics of Insurance · 11 marks 2. Life Insurance Products · 9 marks 3. Non-Life Insurance Products · 5 marks 4. Retirement Planning Basics · 5 marks 5. Retirement Products · 19 marks 6. Miscellaneous Aspects of Retirement Planning · 6 marks 7. Concepts in Taxation · 4 marks 8. Capital Gains · 2 marks 9. Income from Other Sources · 1 marks 10. Taxation of Debt Products · 2 marks 11. Taxation of Equity Products · 4 marks 12. Taxation of Other Products · 4 marks 13. Tax Provisions for Special Cases · 3 marks 14. Basics of Estate Planning · 5 marks 15. Tools for Estate Planning · 15 marks 16. Basics of Behavioural Finance · 7 marks 17. Behavioural Finance in Practice · 3 marks 18. Risk Profiling for Investors · 12 marks 19. Comparison of Products across Categories · 20 marks 20. Case Studies · 13 marks

← Chapter 12: Taxation of Other Products Chapter 14: Basics of Estate Planning →

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