Demerger Cost Basis Calculator
Use the official allocation percentage to divide one original acquisition cost between retained parent shares and the resulting-company shares.
Learn the concept firstWhat Are Corporate Actions?→On a small screen, swipe inside the chart to inspect every entity.
Enter the official allocation percentages to prepare the parent and resulting-company cost ledger.
Source first: a revised company filing can replace an earlier allocation letter. Market prices never determine the tax-cost percentage.
Educational record-preparation tool only. Verify the latest scheme documents, allocation communication, demat credits, fractional settlement and tax position before filing or selling.
Allocate the cost first; judge market performance separately
A qualifying demerger does not give every post-demerger share a fresh market-price cost. It divides the original acquisition cost between the retained parent and each resulting company using the latest official allocation communication.
A clean four-step workflow
Every number in the result can be traced back to a contract note, official allocation letter or demat statement.
Use the simple average or enter every dated purchase lot.
Add every resulting company from the latest allocation letter.
Compare exact entitlement with shares actually credited and cash for fractions.
Keep allocation, dates and settlement evidence ready for a later sale.
Apply the published percentage to the original cost
Original cost × Official allocation %The share ratio determines entitlement and per-share cost. It does not create or replace the official allocation percentage.
The parent keeps the residual
Original cost − All resulting-company costsThe parent and every resulting-company allocation should reconcile exactly to the original total acquisition cost.
Separating a ₹1,00,000 original cost
Suppose 100 parent shares cost ₹1,000 each. An official letter allocates 30% to a resulting company with a 1:1 entitlement. The resulting cost is ₹30,000 or ₹300 per exact new share; the parent retains ₹70,000 or ₹700 per parent share.
One scheme can create more than one resulting holding
Quess published a three-way cost allocation: 41.71% remained with the parent, while 26.47% and 31.82% moved to two resulting companies. One combined workspace exposes whether all percentages reconcile to 100%.
Three records you must keep separate
A clean ledger avoids turning a useful estimate into a misleading tax record.
Exact entitlement versus demat credit
A mathematical fraction may be pooled or settled for cash. Record actual shares and the settlement amount instead of assuming the fraction was credited.
Inherited holding period versus FIFO
Resulting shares carry the original holding period, but later demat disposals use FIFO identification. Keep every original lot date.
Tax cost versus market value
Current price measures today’s researched value and unrealised performance only. It never changes the official cost allocation.
Khadim issued a revised exchange filing after correcting reversed parent and resulting-company percentages. Save the document date and check for a later correction before relying on an allocation.
Open the revised Khadim filing ↗Keep the evidence behind every allocated rupee
These records make a future FIFO sale and capital-gain calculation easier to defend and reconcile.
- Original contract notes and lot dates
- Approved scheme and effective-date notice
- Latest official cost-allocation letter
- Demat credit statement for every entity
- Fractional settlement or trustee advice
- Broker tax-lot statement before any sale
Understand the event, then use the ledger
The lesson explains the corporate action; this calculator owns the allocation arithmetic.
Review Section 73 table items 14–15 and the holding-period provisions before a final tax filing.
Open the official Act ↗The filing shows one parent cost divided across two resulting companies and demonstrates why a single-company calculator is insufficient.
Open the Quess filing ↗Frequently asked questions
How do I use the Demerger Cost Basis Calculator?
Enter the parent shares and original acquisition cost, or switch to Purchase lots for dated FIFO-ready records. Then add every resulting company and copy its allocation percentage and share ratio from the latest official cost-of-acquisition communication. Optional market prices measure current value only.
Where do I find the demerger cost-allocation percentage?
Use the latest official cost-of-acquisition communication published by the demerged company or resulting company after the scheme becomes effective. Save that letter with the original contract notes and check whether a revised filing replaced an earlier percentage.
Can I use listing-day market prices to divide the cost?
No. The company communication supplies the cost-allocation percentages under the applicable demerger framework. Listing-day or current prices can measure market value and unrealised performance, but they must not replace the published tax-cost allocation.
Does the demerger itself create a new total acquisition cost?
No. The original cost is divided. The amount allocated to the resulting-company shares is subtracted from the cost retained with the original demerged-company shares, so both allocated amounts reconcile to the original total cost.
What if one demerger creates shares in several resulting companies?
Add each resulting company to the same workspace. Enter every published allocation percentage and ratio separately. The calculator totals those percentages and leaves the residual cost with the parent, so a missing entity or over-allocation is immediately visible.
How are fractional share entitlements handled?
The calculator separates exact mathematical entitlement, expected whole shares, actual demat credit and the cost attributable to the unsettled fraction. Enter any cash-in-lieu only after checking the company or trustee statement; do not assume a mathematical fraction becomes a demat share.
Do resulting-company shares keep the original acquisition date?
The current Income-tax Act, 2025 framework includes the period for which the original demerged-company shares were held when determining the holding period of resulting-company shares. Purchase Lot Mode therefore carries each original lot date into the allocation ledger.
Why does Purchase Lot Mode matter for demat shares?
Several original purchases can have different dates and costs. The allocation percentage applies to each lot, while later demat disposals are identified under FIFO. Keeping the lot ledger now makes a later sale calculation easier to reconcile with broker and tax records.
Does this calculator calculate final capital gains tax?
No. It prepares acquisition-cost and holding-period records after the demerger. A later sale can involve FIFO identification, grandfathering, transfer expenses, losses, surcharge and other facts. Use the relevant sale lots in the Capital Gains Calculator and verify the final tax return position.