Exit Essar Oil, says Lancelot D'Cunha

Lancelot D'Cunha, CEO at ITI Wealth management told CNBC-TV18, "In Essar Oil if you hold on to the shares and submit it on delisting then you could get a higher price but the issue is that you will have to pay capital gains tax on the gains that you make because if it is sold through the exchange then you get the advantage of securities transaction tax paid on the sell. Thereby if it is a long-term investment then it can be treated as a tax exempt capital gain.”

“He further added, “The basic decision is to exit the stock whether on the exchange or through buyback and only look at the tax differential to help you make a decision as to whether it is better to tender it in or this because the tax on tendering in will be treated as a normal long-term capital gains tax and if you are long-term, you will have to pay 20 percent and if it is short-term then you have to pay 33 percent.”