Capital Gains on Share Buy-Backs: Clause 69 of the Income Tax Bill, 2025 vs. Section 46A of the Income-tax Act, 1961,

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....025 Introduction Clause 69 of the Income Tax Bill, 2025, addresses the taxation of capital gains arising from the purchase by a company of its own shares or other specified securities. This provision is significant as it impacts shareholders and holders of specified securities, influencing their tax liabilities when companies engage in buy-back transactions. The clause is part of a broader legis....

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....consideration from a company for the purchase of its own shares or securities, the difference between the acquisition cost and the consideration received is deemed as capital gains. This provision ensures that gains are recognized in the year the transaction occurs, aligning with the principle of taxation on realized gains. Clause 69(2): Consideration Deemed to be Nil Under Clause 69(2), if the ....

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....cks must ensure accurate reporting and compliance with the provision to avoid penalties. Shareholders must be aware of their tax obligations arising from such transactions, potentially impacting their investment decisions. Tax practitioners must advise clients on structuring transactions to optimize tax outcomes while ensuring compliance. Comparative Analysis with Section 46A of the Income-tax Ac....

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....nition of Specified Securities: Clause 69 aligns with the Companies Act, 2013, while Section 46A refers to the Companies Act, 1956, indicating an update to reflect legislative changes. Conclusion Clause 69 of the Income Tax Bill, 2025, represents a critical update to the taxation framework for capital gains arising from the repurchase of shares or specified securities. By aligning with contempor....