How does Reliance Industries demerger into Jio Financial affect capital gains calculations for both the companies?

Modified on Tue, 05 Sep 2023 at 12:06 PM

If you are holding shares of Reliance Industries and have received shares of Jio Financial as a result of the demerger, it's important to note that the cost of your original Reliance shares could be affected by the cost-acquisition ratio associated with the demerger. As a result of this, the cost of your Jio Financials is also derived based on the demerger ratio. 

This change in cost allocation becomes significant when you decide to sell any of these two shares, whether they are from Reliance Industries or Jio Financial, in the future. To ensure accurate calculation of your capital gains, it is necessary to allocate the appropriate cost to each company based on the cost-acquisition ratio. 

MProfit computes the capital gains for any demerged company as per the example below. 
Let's delve into the details with illustrative examples.

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