Provisions relating to income on receipt of capital asset or stock-in-trade by specified person from specified entity as per S.8 of ITA 2025 and S.9B of ITA 1961

Section 8 of ITA 2025

Section 9B of ITA 1961

Remarks - observation

8. Income on receipt of capital asset or stock-in-trade by specified person from specified entity.

Income on receipt of capital asset or stock in trade by specified person from specified entity.

Difference of phrase stock-in-trade in ITA 2025

stock in trade in ITA 61 in heading and sub-sections.

(1) Where a specified person receives during the tax year any capital asset or stock-in-trade, or both, from a specified entity in connection with the dissolution or reconstitution of such specified entity, then the specified entity shall be deemed to have transferred such capital asset or stock-in-trade, or both, to the specified person in the year in which such capital asset or stock-in-trade, or both, are received by the specified person.

9B. (1) Where a specified person receives during the previous year any capital asset or stock in trade or both from a specified entity in connection with the dissolution or reconstitution of such specified entity, then the specified entity shall be deemed to have transferred such capital asset or stock in trade or both, as the case may be, to the specified person in the year in which such capital asset or stock in trade or both are received by the specified person.

Rephrasing of provision in ITA25 in new style by using comma

Although any different intention has not been expressed, however, in course of litigation differences can be initiated or created by litigant ITD and taxpayers will be forced to contest.

In both, tax will be in hands of specified entity and in the TY/PY in which specified person receive capital asset or stock-in-trade.

2) Any profits and gains arising from the deemed transfer mentioned in sub-section (1) by the specified entity shall be-

2) Any profits and gains arising from such deemed transfer of capital asset or stock in trade or both, as the case may be, by the specified entity shall be-

Same with new style in ITA 2025 to make precise provision

(i) deemed to be the income of such specified entity of the tax year in which such capital asset or stock-in-trade, or both, were received by the specified person; and

(i) deemed to be the income of such specified entity of the previous year in which such capital asset or stock in trade or both were received by the specified person; and

Same . With style differences by use of comma.

(ii) chargeable to income-tax as income of such specified entity under the head "Profits and gains of business or profession" or under the head "Capital gains".

(ii) chargeable to income-tax as income of such specified entity under the head "Profits and gains of business or profession" or under the head "Capital gains", in accordance with the provisions of this Act.

(3) For the purposes of this section, fair market value of the capital asset or stock-in-trade, or both, on the date of its receipt by the specified person shall be deemed to be the full value of the consideration received or accruing as a result of such deemed transfer mentioned in sub-section (1).

(3) For the purposes of this section, fair market value of the capital asset or stock in trade or both on the date of its receipt by the specified person shall be deemed to be the full value of the consideration received or accruing as a result of such deemed transfer of the capital asset or stock in trade or both by the specified entity.

(4) If any difficulty arises in giving effect to the provisions of this section and section 67(10), the Board may, with the previous approval of the Central Government, issue guidelines for removing the difficulty.

4) If any difficulty arises in giving effect to the provisions of this section and sub-section (4) of section 45, the Board may, with the approval of the Central Government, issue guidelines for the purposes of removing the difficulty.

(5) Every guideline issued by the Board under sub-section (4) shall be laid before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in such guideline or both Houses agree that the guideline, should not be issued, the guideline shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that guideline.

(5) Every guideline issued by the Board under sub-section (4) shall, as soon as may be after it is issued, be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the assessee.

Major differences:

About period for which required to be so laid in ITA 2025

In ITA 2025 it is provided that a. Parliament has the authority to review, amend, or even annul the guidelines issued by the board, b. whatever has already been done in accordance with the guidelines remains valid and lawful, in ITA 2025.

This is not found the section of ITA 1961.

And binding nature of guidelines provided in ITA 1961 is not found in ITA 2025

(6) For the purposes of this section,-

Explanation.-- For the purposes of this section,-

(a) "specified entity" means a firm or other association of persons or body of individuals (not being a company or a co-operative society);

(ii) "specified entity" means a firm or other association of persons or body of individuals (not being a company or a co-operative society);

Same and similar

(b) "specified person" means a person, who is a partner of a firm or member of other association of persons or body of individuals (not being a company or a co-operative society) in any tax year;

(iii) "specified person" means a person, who is a partner of a firm or member of other association of persons or body of individuals (not being a company or a co-operative society) in any previous year.

Same and similar except TY/ PY

Explanation.-- For the purposes of this section,-

In ITA 2025 not by way of Explanation as in ITA1961

(c) "reconstitution of the specified entity" means, where-

(i) "reconstitution of the specified entity" means, where-

Same and similar

(i) one or more of its partners or members, of such specified entity ceases to be partners or members; or

a) one or more of its partners or members, as the case may be, of such specified entity ceases to be partners or members; or

Same and similar

(ii) one or more new partners or members are admitted in such specified entity in such circumstances that one or more of the persons who were partners or members, of the specified entity, before the change, continue as partner or partners or member or members after the change; or

(b) one or more new partners or members, as the case may be, are admitted in such specified entity in such circumstances that one or more of the persons who were partners or members, as the case may be, of the specified entity, before the change, continue as partner or partners or member or members after the change; or

(iii) all the partners or members, of such specified entity continue with a change in their respective share or in the shares of some of them.

Newly provided in ITA 2025.