Tata Motors advises shareholders on cost apportionment post-demerger

Mumbai, November 12, 2025 – Tata Motors Passenger Vehicles Limited has provided guidance to shareholders regarding the apportionment of the cost of acquisition for equity shares following a Composite Scheme of Arrangement. The scheme involved the demerger of the commercial vehicles business into Tata Motors Limited and the amalgamation of Tata Motors Passenger Vehicles Limited with Tata Motors Limited. The effective date of the scheme was October 1, 2025.

Under the guidance, shareholders will apportion their total cost of acquisition of original equity shares. The new Tata Motors Limited shares will account for 31.15% of the total cost, while Tata Motors Passenger Vehicles Limited shares will account for 68.85%. For example, a shareholder who purchased 1,000 ordinary shares of TML at INR 400 per share would apportion INR 1,24,600 to the 1,000 resulting company shares and INR 2,75,400 to the 1,000 original demerged company shares.

This apportionment aligns with Section 49(2C) of the Income-tax Act, 1961, and clarifies that the issue of equity shares by the Resulting Company pursuant to the Scheme will not be considered a transfer under Section 47(vid) of the Act. The acquisition date for the Resulting Company's equity shares will be deemed the same as for the Demerged Company's equity shares. This communication serves as general guidance, and shareholders are advised to consult their own tax advisors.