Deemed transfer of assets on entity reconstitution treats fair market value as consideration and taxes entity income accordingly. A capital asset or stock-in-trade received by a specified person from a specified entity on dissolution or reconstitution is deemed transferred by the entity in the year of receipt; profits or gains from that deemed transfer are included in the entity's income and charged under Profits and Gains of Business or Profession or Capital Gains, with fair market value on the date of receipt as the consideration. The Board may issue guidelines, with prior Central Government approval, to remove implementation difficulties, subject to parliamentary scrutiny and a limited issuance window.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Deemed transfer of assets on entity reconstitution treats fair market value as consideration and taxes entity income accordingly.
A capital asset or stock-in-trade received by a specified person from a specified entity on dissolution or reconstitution is deemed transferred by the entity in the year of receipt; profits or gains from that deemed transfer are included in the entity's income and charged under Profits and Gains of Business or Profession or Capital Gains, with fair market value on the date of receipt as the consideration. The Board may issue guidelines, with prior Central Government approval, to remove implementation difficulties, subject to parliamentary scrutiny and a limited issuance window.
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