Cost of acquisition of a capital asset in the hands of resulting company to be the cost for which the demerged company acquired the capital asset

[Admin TMI]

Question - What are the amendment proposed in section 49 of the Income-tax Act in Finance Bill 2015 ?

AI Summary

Finance Bill 2015: Amendment to Section 49 clarifies asset transfer rules in company demergers. The discussion addresses the proposed amendment in the Finance Bill 2015 concerning section 49 of the Income-tax Act. It clarifies that when a capital asset is transferred from a demerged company to a resulting Indian company under a demerger scheme, it is not considered a transfer. The cost of acquisition for the resulting company should be the cost incurred by the demerged company, including any improvements. The holding period for the resulting company includes the time the demerged company held the asset. The amendment, effective from April 1, 2016, applies to the assessment year 2016-17 and onwards.