Sapphire-Devyani Merger: Tax Rules for Shareholders Revealed

• Sapphire Foods and Devyani International are merging, consolidating KFC and Pizza Hut operations under one entity.
• The merger is structured as tax-neutral; shareholders won't pay capital gains tax during the share exchange.
• Tax liability arises only when the new Devyani International shares are eventually sold.
• Cost of acquisition for new shares will be calculated by apportioning the original Sapphire Foods share cost.
• The holding period of original Sapphire shares carries forward, impacting long-term (LTCG) or short-term (STCG) capital gains tax.

Why It Matters: Shareholders face no immediate tax on Sapphire-Devyani merger; tax applies only upon selling new shares.