Comparison of Section 70 "Transactions not regarded as transfer" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ers (individuals, HUFs, companies, financial institutions, funds), tax authorities and the securities/regulatory sector. Effective date or decision date: Not stated in the document. Background & Scope Statutory hook: Clause 70 (Bill) operates to exclude certain transfers from the operation of section 67 (capital gains). The clause covers a broad range of situations including partition of HUFs, transfers under will/gift/irrevocable trust, intra-group transfers between parent and subsidiary (where shareholding conditions are met), amalgamation and demerger scenarios (including certain cross-border restructurings), bank amalgamations under the Banking Regulation Act, demergers and business reorganisations, specific non-resident to non-reside....

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....on-resident transfers outside India in specified securities and bonds (clauses (p)-(s)). * Relocation of funds into IFSC-located resultant funds and corresponding shareholder/unit-holder exchanges (clauses (t) & (u)), with detailed definitions in the Table. * Conversions and redemptions - sovereign gold bonds redemption, conversion of gold to Electronic Gold Receipt, bonds/debentures to shares, preference shares to equity (clauses (x), (y), (z), (za), (zb)). * Transfers for public institutions and art acquisitions to government/universities/museums (clause (zc)). * Succession transfers from firms/sole proprietorships to companies, and conversion of companies to LLPs subject to conditions (clauses (zd), (ze), (zf)). * Other specifi....

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....ital gains in the country in which the [foreign] company is incorporated." Illustrations * Example 1: An Indian parent transfers a non-stock-in-trade capital asset to a wholly owned Indian subsidiary. If the parent (or nominees) hold the whole share capital and the subsidiary is Indian, the transfer is not a "transfer" under clause 70(c). * Example 2: A foreign fund (original fund) relocates assets to a resultant fund in an IFSC on or before 31 March 2025 (as per Bill). If consideration is issued in units/shares to original fund holders in the same proportion, the relocation is not a "transfer" under clause 70(t)/(u), subject to the registration/certificate requirements for the resultant fund. * Example 3: A private company con....

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....s must check which specific category of foreign share is intended under the final section 9 reference. Exact impact depends on section 9's text (Not stated in the document). * Formatting and wording differences in certain clauses: Some clauses in Document 2 include parenthetical clarifications such as "(where the provisions of sections 230 to 232 of the Companies Act, 2013 do not apply)" in clauses (l) and (m). Document 1 relocates that qualification out of the clause and instead states in those clauses that the provisions of sections 230-232 shall not apply (explicitly appended at the end of clauses (l) and (m)). * Practical impact: The enacted text more clearly and directly excludes application of Companies Act sections 230 to 232....

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....le VI conditions (administrative detail), which may affect eligibility assessments; practitioners must consult Schedule VI for operational criteria (Not stated in the document). * Other drafting refinements and additions: Document 1 includes newly numbered subclauses and adds or clarifies certain definitions (for example, the Table entry 5(a)(B) referring to Abu Dhabi Investment Authority appears more explicitly framed in Document 1). * Practical impact: These drafting refinements may tighten eligibility and compliance requirements in conversion and relocation scenarios; the substantive change depends on the interplay with other statutory text (Not stated in the document). Practical Implications * Compliance and risk areas: Tax neutr....