Amalgamation share transfers remain non-taxable when consideration is shares in an Indian amalgamated company, with carryover cost basis.

Transfer by a shareholder, in a scheme of amalgamation, of shares held in the amalgamating company is treated as not a transfer where the consideration is allotment of shares in the amalgamated company, except where the shareholder itself is the amalgamated company, and the amalgamated company is an Indian company. The transferee's cost basis follows the shareholder's cost of acquisition, and the period of holding includes the previous owner's holding period.

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