Tata Motors just handed shareholders a 1:1 split in its demerger—but tax expert Sujit Bangar warns many could walk straight into a tax mess if they ignore one critical step.

With Tata Motors now officially split into two separate entities—Tata Motors Ltd (CV Co.) and Tata Motors Passenger Vehicles Ltd (PV Co.)—over 66.5 lakh shareholders have received one share in each company for every Tata Motors share held on October 14. Advertisement

While the move is tax neutral under Indian law, Bangar, founder of TaxBuddy.com, says investors can’t afford to treat it like a free lunch. “Yes, there is no tax on allotment. But your job starts now,” he posted on LinkedIn. “You must split your original share cost as per the company-declared ratio. This single step determines your capital gains.”

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