Financial year of taxability fixes when capital gains arise based on transfer mode, receipt, or conversion timing.

The provision designates the financial year of taxability for capital gains by reference to the specific transfer mode: parent subsidiary transfers taxed on sale of converted business assets or on cessation of parent holding; noncompliant reorganisation conditions taxable when prescribed conditions fail; compulsory acquisition taxable when compensation is received; conversion to business asset taxable on subsequent sale; contributions, distributions on dissolution, part performance possession, damage or destruction, retirement distributions and other transfers taxed in the year the asset is transferred, distributed, possession taken, or money received. Capital gains bond transfers and specified withdrawals have distinct taxable years tied to transfer or withdrawal timing.

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