Comparison of Section 40 'Special provision for computation of cost of acquisition of certain assets' between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

Cost of acquisition continuity: transferee inherits transferor's cost plus improvements and transfer expenses for stock-in-trade sales.

When an asset received on amalgamation, by gift, will, irrevocable trust, or HUF partition is sold as stock-in-trade, the transferee's cost of acquisition is the sum of the transferor's original cost, any cost of improvement, and any expenditure incurred by the transferor or amalgamating company wholly and exclusively in connection with the transfer; certain assets are excluded by separate statutory provision and no alternative valuation or evidentiary rules are provided.