Section 14 - Amendment of section 47

Amalgamation and demerger transfers exempt where shareholder continuity and foreign non-taxation conditions are satisfied.

Amendments add non-recognition rules to section 47 for transfers of foreign-company shares in amalgamation or demerger when the shares derive substantially their value from Indian company shares, subject to shareholder continuity thresholds and absence of capital gains taxation in the country of incorporation; demergers to which these provisions apply are excluded from sections 391-394 of the Companies Act, 1956. A separate exemption covers unit exchanges in consolidation of mutual fund schemes where consolidation is among equity-oriented schemes or among non-equity schemes, with defined terms provided.