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of <h1>Income Tax Bill's Clause 71 and Section 47A tackle capital gains exemptions to prevent tax avoidance in asset transfers.</h1> Clause 71 of the Income Tax Bill, 2025, and Section 47A of the Income-tax Act, 1961, both focus on the withdrawal of capital gains exemptions when specific conditions are unmet. These provisions aim to prevent tax avoidance through improper capital asset transfers, ensuring that capital gains are taxed if exemptions are violated. Clause 71 applies when a transferee company converts a capital asset into stock-in-trade or when shareholding conditions are not maintained. Section 47A addresses similar scenarios and additional cases like stock exchange membership transfers. Both provisions emphasize compliance to avoid unexpected tax liabilities, reflecting a consistent approach to maintaining tax integrity.
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