New Delhi, Sept. 24 -- If you have inherited physical shares that your father purchased several decades ago, subsequently converted them into demat form and sold them in 2026, determining the correct cost of acquisition can be complicated.

The tax treatment of inherited capital assets generally allows the heir to step into the shoes of the previous owner for determining the cost. However, special grandfathering provisions apply to listed equity shares and units of equity-oriented mutual fund schemes acquired before February 1, 2018.

For an inherited capital asset, the cost of acquisition is generally taken as the cost at which the original owner acquired the asset.

Where the original owner acquired the asset before April 1, 2001, the t...