CAF-2 · Chapter 9 · Question 14 of 15
Mr. Ali inherited 5,000 shares of a listed company from his father on 1 July 2025. His father was the original allottee of these shares at Rs. 10 per share. The fair market value of these shares at the time of inheritance was Rs. 15 per share. Mr. Ali sold these shares on 30 January 2026 for Rs. 20 per share via NCCPL. What cost will be used to compute Mr. Ali's capital gain?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) A) Rs. 10 per share (the original cost to his father).
Explanation
For assets acquired by inheritance or gift from relatives, there is no acquisition cost for the person acquiring the asset. Therefore, the original cost of the transferor (the father's cost of Rs. 10 per share) is treated as the cost of the asset for computing the capital gain.
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