Tata Motors on Thursday announced the apportionment ratio for determining the cost of acquisition of shares following the demerger of its Passenger Vehicles (PV) and Commercial Vehicles (CV) businesses.
Tata Motors demerger came into effect on October 1, 2025, and the record date was October 14. The equity shares of the newly demerged commercial vehicle (CV) arm of Tata Motors were listed on BSE and NSE on November 12.
Tata Motors Passenger Vehicles has announced the apportionment of cost of acquisition of equity shares of the company and Tata Motors (formerly TML Commercial Vehicles Limited) pursuant to the demerger.
Shareholders will allocate 68.85% of their original investment cost to Tata Motors Passenger Vehicles Ltd (TMPVL) and 31.15% to Tata Motors Ltd (TMCV), formerly known as TML Commercial Vehicles Ltd, according to the stock exchange filing.
Illustration of Cost Split
For instance, if a shareholder held 1,000 Tata Motors shares at ₹400 per share, the total cost of acquisition would amount to ₹4,00,000 before the demerger. Based on the Share Entitlement Ratio, 1000 shares of TMLCVL would be allotted to the said shareholder.
The total cost of acquisition of ₹4,00,000 would be apportioned in the aforesaid ratio:
– ₹1,24,600 (31.15%) will now represent the cost of acquisition for 1,000 shares of Tata Motors Ltd (CV arm).
– ₹2,75,400 (68.85%) will represent the cost for 1,000 shares of Tata Motors Passenger Vehicles Ltd (PV arm).
No Change in Holding Period or Transfer Treatment
The company emphasized that the allotment of new Commercial Vehicles shares will not be considered a transfer under Section 47(vid) of the Income Tax Act. Furthermore, the date of acquisition for the new CV shares will be deemed the same as that of the original Tata Motors shares held before the demerger.
Tata Motors Demerger Tax Treatment
Under the demerger terms, shareholders received one share of Tata Motors Ltd (CV) for every one share held in Tata Motors Passenger Vehicles Ltd (PV). Tata Motors demerger will not be treated as a transfer for tax purposes as per the regulations.
The company clarified that the cost of acquisition of shares must be divided in proportion to the net book value of assets transferred in the demerger relative to the net worth of the company immediately before the split.
At 11:45 AM, Tata Motors Passenger Vehicles share price was trading 0.65% lower at ₹399.70 apiece, while Tata Motors share price was trading 0.50% lower at ₹326.00 apiece on the BSE.
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