Capital Gain on Distribution Of Assets By Companies In Liquidation - (New) Section 68 / (Old) Section 46

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.... Overriding Provision - Irrespective of anything is contained in section 67 Normally, transfer of a capital asset may attract capital gains tax in the hands of the transferor. However, when a company is liquidated and its assets are distributed to shareholders: • The company is merely distributing its remaining assets as part of the winding-up process. • Such distri....

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....ue of Consideration for Capital Gains Computation the sum so arrived at shall be deemed to be the full value of the consideration for the purposes of section 72. Under Section 46 of the Income Tax Act, 1961 [ Upto  31.03.2026 ] Section 46(1): Tax Treatment in the hands of Company  This section is applicable where the assets of the company are distributed to shareholders ....

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....ated above, cost of acquisition/ indexed cost of acquisition, expenditure on sale etc. shall be deducted to find out capital gain.     NOTES:- • While determining the period of holding of the asset, the period subsequent to the date of liquidation shall not be considered • Where a shareholder receives on liquidation amount less than what he has inve....

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....ents. [ Commissioner of Income-Tax, Tamil Nadu Versus Inland Agencies Pvt. Limited 1981 (10) TMI 5 - Madras High Court ] • Interpretation of the term "assets" in section 46(2) of the Income-tax Act, 1961. [ N Bagavathy Ammal Versus Commissioner of Income-Tax And Another 2003 (1) TMI 5 - Supreme Court ] • A liquidation distribution is taxable as dividend to the e....