Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    PMLA and Predicate Offenses: Deciphering the Scope of Proceeds of Crime under PMLA: A Supreme Court ...
    Resolution Applicant's Eligibility under the IBC: A Balancing Act Between Stringent Rules and MSME P...
    Case LawsIncome Tax
    Dynamics of Tax Exemption Registrations: A Comprehensive Analysis of ITAT Ahmedabad’s Decision on ...
    Case LawsIncome Tax
    Transfer Pricing Litigation: The Evolving Landscape of Arm's Length Price Determination in India
    Case LawsCentral Excise
    Pre-deposit Compliance in Appeals: Judicial Overreach by CESAT
    Revisiting Shareholder Rights in Securities Law: Deciphering the Bounds of Confidentiality in Corpor...
    Case LawsCorporate Laws
    Professional Conduct in Auditing: Exploring the Jurisdiction and Compliance in Auditor (Chartered Ac...
    Comprehensive Legal Analysis of Jurisdictional Challenges and SEBI's Regulatory Framework in Securit...
    Case LawsIncome Tax
    Revisiting the Scope of Revisionary Powers U/s 263: Assessing the Adequacy of Assessment Procedures ...
    Case LawsVAT / Sales Tax
    The Doctrine of Promissory Estoppel in Governmental Policy Decisions: Tax Incentives and Public Inte...
    Case LawsIncome Tax
    Maintaining the Sanctity of Search and Seizure Procedures: Emphasizing the rigorous compliance with ...
    The Confluence of Insolvency and Limitation Laws: Insights from a NCLAT Decision
    Case LawsIncome Tax
    Analyzing the Tax Implications of Cross-Border Payments: Recognizing the payments as either 'Royalty...
    Case LawsCustoms
    A Judicial Perspective on Duty Assessment and Procedural Fairness in Customs Law: Validity of CBIC C...
    Case LawsIncome Tax
    Non-Delegability of Discretionary Powers in Income Tax Assessments: Administrative Discretion in Spe...
    Case LawsIncome Tax
    Taxation of Domain Registration Services in Godaddy.Com LLC Case: Tax Implications for Digital Serv...
    Reinforcing Fair Administrative Processes in GST Registration Cancellation: An In-Depth Case Study
    Case LawsIndian Laws
    The Arbitration Conundrum: Enforceability of Unstamped Agreements
    Case LawsVAT / Sales Tax
    Reassessing Tax Penalties: HDFC Bank's Challenge under the DVAT Act
    Input Tax Credit Eligibility under GST Legislation: Time-Bound Compliance in GST ITC Cases
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsPMLA
    Show AI Summary
    Proceeds of crime: PMLA targets handling of tainted assets even where the person is not named in the predicate offence, scope narrowed for conspiracies.
    Existence of proceeds of crime is a prerequisite for an offence under the PMLA and must be derived from a scheduled offence; the PMLA reaches persons who handle, conceal or possess tainted proceeds even if not named in the predicate offence. Conspiracy under Section 120B becomes a scheduled offence only when the conspiracy aims to commit an offence already listed in the PMLA Schedule, narrowing scheduled-offence scope. Property acquired prior to the scheduled offence cannot be treated as proceeds, whereas disputed acquisitions require trial determination of their linkage to tainted funds.
    Case LawsIBC
    Show AI Summary
    Resolution applicant eligibility under Section 29A clarified; MSME exemption under Section 240A applies at plan submission stage.
    Whether a resolution applicant is disqualified under Section 29A depends on the ineligibility criteria and the timing of assessment; the operative date for eligibility is the submission of the resolution plan, and Section 240A provides an MSME-targeted exemption from certain disqualifications to protect continuity and livelihoods.
    Case LawsIncome Tax
    Show AI Summary
    Tax exemption registration: tribunal ordered reconsideration where delay arose from bona fide reliance on provisional registration and circulars.
    The Tribunal held that rejection of the final registration application under Section 80G for being time barred was improper where the Commissioner did not consider administrative circulars extending filing timelines and the trust's bona fide reliance on provisional registration; the ITAT set aside the order and directed reconsideration with an opportunity to be heard.
    Case LawsIncome Tax
    Show AI Summary
    Arm's Length Principle enforcement: comparables, functional profiling, and admissibility of additional evidence determine transfer pricing outcomes.
    Dispute concerns determination of Arm's Length Price (ALP) for international transactions, focusing on comparable selection, adjustments for functional differences, and functional profiling's effect on ALP reliability. The Tribunal also deals with the admissibility of additional evidence on appeal and scrutiny of changes in benchmarking approaches across assessment years, stressing contemporaneous, consistent documentation and justification for methodological changes while balancing procedural finality and factual completeness.
    Case LawsCentral Excise
    Show AI Summary
    Pre-deposit requirement undermined by tribunal restoration without compliance, raising jurisdictional and laches concerns in excise appeals procedure scrutiny.
    The Tribunal's restoration and allowance of excise appeals without a prior pre-deposit requirement raises whether a lower tribunal may waive mandatory pre-deposit obligations and whether such action aligns with supervisory limits imposed by higher court directives and doctrines like functus officio and res judicata.
    Case LawsSEBI
    Show AI Summary
    Shareholder access to confidential corporate documents affirmed where confidentiality is overstretched, strengthening minority investor protections.
    Minority shareholders are entitled to access corporate documents where confidentiality claims are overstated; confidentiality and privilege cannot be used to withhold information necessary for assessing compliance with securities law. SEBI's settlement framework cannot shield material information from shareholder scrutiny; regulatory processes must balance investigatory integrity with transparency and natural justice. Non compliance with Minimum Public Shareholding norms undermines market integrity and minority rights, and settlements of serious violations require sufficient transparency to protect investor interests.
    Case LawsCorporate Laws
    Show AI Summary
    Retrospective jurisdiction of regulator challenged; effect on auditor liability, standards compliance and sanctions under companies law.
    Allegations of professional misconduct assert auditors failed to comply with statutory audit obligations, disclose material facts, exercise due diligence, obtain necessary information, and identify departures from accepted audit procedures. Appellants challenge the regulator's retrospective jurisdiction, invoke constitutional protection against retrospective penalization, and allege procedural breaches of natural justice; the regulator maintains jurisdiction, contends it afforded hearing opportunities, and asserts substantive non compliance with Standards on Auditing.
    Case LawsSEBI
    Show AI Summary
    Territorial jurisdiction disputes in securities cases shape venue decisions and challenge regulatory settlement revocations and discretion.
    Disputes over venue in securities enforcement pivot on territorial jurisdiction and forum non-conveniens, using cause of action and convenience factors to determine appropriate forum. SEBI's settlement regime under the SEBI (Settlement Proceedings) Regulation 2018 and the regulator's power to revoke settlements raise questions about regulatory discretion, enforceability of negotiated resolutions, and implications for corporate governance and market integrity, while High Courts' supervisory role under Article 226 intersects with statutory enforcement mechanisms.
    Case LawsIncome Tax
    Show AI Summary
    Revisionary powers under Section 263 limited where assessment thoroughly examined transactions and no specific error is shown.
    Scope of revisionary powers under Section 263 is limited where the original assessment shows a detailed examination and allowance of losses; direction for re-examination without specific findings of error prejudicial to revenue is insufficient. Transactions integral to business and carried out as hedging do not fall within the definition of speculative transactions under Section 43(5).
    Case LawsVAT / Sales Tax
    Show AI Summary
    Promissory estoppel prevents withdrawal of promised tax incentives for industrial units that invested in reliance on them.
    The dispute concerns whether the State could withdraw tax incentives by reclassifying areas and thereby affect units that invested relying on those incentives. Applying promissory estoppel, the court determined that promises inducing substantive investment could not be retracted to the detriment of the beneficiaries during the promised exemption period, balancing that protection against the State's public interest prerogative and subsequent structural tax reform.
    Case LawsIncome Tax
    Show AI Summary
    Search and seizure procedural compliance: satisfaction note requirement under section 153C governs validity of assessments.
    Assessments against persons other than the searched individual require a recorded satisfaction by the assessing officer that seized assets or documents belong to that other person; absence of a satisfaction note in the searched person's file invalidates consequential assessments under the search-derived assessment provisions. Determination of the applicable assessment years hinges on whether the assessment period is tied to the date of search, the date satisfaction is recorded, or the date seized material is received, requiring harmonious construction to align enforcement with taxpayer protections.
    Case LawsIBC
    Show AI Summary
    Limitation in insolvency: admissibility requires established debt and default and bars further merits inquiry at admission.
    Where a claim establishes debt and default and the petition is within limitation, the Tribunal's role at the admission stage is limited to admitting the corporate insolvency resolution process without undertaking an extensive merits inquiry into the underlying debt or default.
    Case LawsIncome Tax
    Show AI Summary
    Characterisation of cross-border payments as royalty or service fees determines withholding obligations under tax treaty and domestic law.
    Characterisation of cross-border payments under the Income Tax Act and the India-USA DTAA focused on whether payments to a US non-resident constituted royalty or fees for included services under section 9(1)(vii) and Article 12, whether TDS obligations arose, and whether sections 201(1) and 201(1A) could be invoked; the Karnataka High Court and ITAT concluded the payments were not royalty/fees for included services, services were rendered outside India, the payee lacked an Indian permanent establishment, and therefore withholding obligations did not arise.
    Case LawsCustoms
    Show AI Summary
    Procedural fairness in customs law limits administrative conditions on provisional release, ensuring statutory discretion and fair hearing.
    The court evaluated whether the impugned Circular and order unlawfully limited the adjudicating authority's statutory discretion by imposing conditions on provisional release, and whether those measures violated principles of natural justice; it emphasised that executive instructions may supplement but cannot supplant statutory provisions and that administrative actions must preserve statutory discretion and fair hearing requirements.
    Case LawsIncome Tax
    Show AI Summary
    Non-delegability of discretionary powers: extension of tax audit report time must be granted by assessing officer, not delegate.
    The power to order a special audit and to extend the timeframe for submission of the audit report is vested in the Assessing Officer and must be exercised by that officer alone; administrative convenience cannot justify delegation to the Commissioner. An extension granted by the Commissioner, even if prompted by the AO's recommendation, is inconsistent with the statutory scheme and can render subsequent assessment orders vulnerable to being barred by limitation.
    Case LawsIncome Tax
    Show AI Summary
    Royalty characterization of domain registration fees requires a transfer of proprietary or use rights; mere registrar facilitation does not qualify.
    Whether fees for domain name registration qualify as royalty depends on whether the registrar transfers a proprietary or right-to-use interest; a registrar acting as intermediary under its accreditation agreement that disclaims ownership and does not convey exclusive or transferable rights does not convert registration fees into royalty.
    Case LawsGST
    Show AI Summary
    Natural justice in GST registration: deficient show cause notices require reconsideration and a fresh opportunity to respond.
    Cancellation of GST registration on grounds such as fraud or suppression must comply with natural justice; a show cause notice lacking specific allegations and a decision that does not consider the taxpayer's response constitutes procedural deficiency, necessitating administrative reconsideration with a reasoned notice that permits an adequate reply.
    Case LawsIndian Laws
    Show AI Summary
    Arbitration agreement enforceability tested against stamp duty compliance, affecting admissibility and tribunal jurisdiction.
    The central issue is whether an arbitration agreement in an unstamped instrument is enforceable, engaging the Arbitration Act, Stamp Act and Contract Act and asking if courts must examine only the existence of an arbitration clause or also its validity when stamp duty non compliance is alleged. The text contrasts lines of authority treating non stamping as either a jurisdictional bar that voids enforceability or a curable defect affecting admissibility, and highlights statutory mechanisms for stamping, impoundment, and remediation while mapping the practical consequences for arbitration access and enforcement.
    Case LawsVAT / Sales Tax
    Show AI Summary
    Penalty proportionality: penalties require deceptive conduct and mens rea before applying to disputed tax assessments.
    The decision analyzes penalties under the DVAT framework in relation to sales of repossessed vehicles, stressing that taxability remained unsettled and that penalties require conduct that is false, misleading, or deceptive. It highlights that mens rea is central to quasi criminal tax penalties and that proportionality and reasoned discretion are prerequisites to lawful penal levies; absent those elements, penalty imposition lacks statutory support.
    Case LawsGST
    Show AI Summary
    Input Tax Credit time limits require strict compliance with statutory filing conditions, not relaxation for business constraints.
    The court construes Input Tax Credit as a concession contingent on strict compliance with statutory prerequisites, holding that time-bound procedural conditions operate as substantive preconditions to claiming ITC. The non-obstante clause is given a limited operative scope and does not nullify mandatory temporal conditions; established principles of tax-statute interpretation require literal application of the scheme and adherence to filing timelines despite commercial hardships.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of Section 73 "Cost with reference to certain modes of acquisition" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      29 August, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 73 Cost with reference to certain modes of acquisition.

      Income-tax Act, 2025

      At a Glance

      Document: Clause 73 of the Income Tax Bill, 2025 (Old Version). It sets out deemed cost-of-acquisition rules for specified modes of acquisition of capital assets. The provision affects taxpayers (transferors/transferees, companies, mutual funds, trusts), and tax administration in determining capital gains. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hook: Clause 73 of the Income Tax Bill, 2025. The clause prescribes deemed cost of acquisition for capital assets that become the property of an assessee by various modes (gift, succession, liquidation distribution, trust transfers, specified transfers u/s 70(1) variants, demerger, consolidation of mutual funds, conversion in LLP, etc.). The clause sets out a Table with 24 serial entries mapping specific acquisition scenarios (column B) to the deemed cost of acquisition (column C).

      Definitions/explanations within the clause: Sub-section (2) defines "previous owner of the property" for serial number 1; it adopts SEBI Circular definitions for "main portfolio", "segregated portfolio" and "total portfolio" for serial numbers 11 and 12; it defines "net worth" for serial numbers 14 and 15; and it provides that certain provisions (serial numbers 2, 14 and 15) shall, as far as may be, also apply to business reorganisation of a co-operative bank as referred to in section 65.

      Statutory Provision Mode

      Text & Scope

      The clause covers multiple modes whereby an assessee acquires capital assets and specifies the deeming rule for cost of acquisition in each scenario. Core categories include acquisition by gift/will/succession/liquidation/trust, corporate reorganisations (amalgamation, demerger, exchanges under specific section 70(1) heads), mutual fund consolidations/segregations, conversion of LLP interests, redemption of GDRs, transfers involving Electronic Gold Receipts, units of business trusts, assets declared under the Income Declaration Scheme, assets where value was subject to transfer pricing u/s 92(2)(m), and assets of trusts/institutions where accreted income was computed u/s 352.

      Interpretation

      The clause adopts a principle of continuity of cost: when an asset passes to an assessee by specified non-purchase modes, the cost is generally the cost to the previous owner (often adjusted for improvements). For certain specified assets (e.g., amalgamation, demerger, segregated portfolios, consolidations), the clause prescribes formulaic apportionment or special rules to determine cost. For some categories (specified securities/sweat equity and assets declared under a prior disclosure scheme), fair market value is adopted as the relevant cost.

      Legislative intent suggested by text: to ensure tax neutrality in non-market transfers by preserving the prior owner's cost base (or substituting an objective market value where appropriate), and to provide clear mechanical rules for corporate reorganisations and fund restructurings. (Legislative history or policy rationale beyond the text: Not stated in the document.)

      Exceptions/Provisos

      No separate provisos are present beyond the Table and sub-section (2) clarifications. Specific carve-outs are embedded in entries (e.g., some entries only apply to shares of amalgamating companies, or to specified securities referred to in a particular section). Thresholds or monetary limits: Not stated in the document.

      Illustrations

      • Example 1: A person receives shares by inheritance (serial 1). Deemed cost = cost for which the previous owner acquired the shares, increased by cost of improvements incurred by either the previous owner or the assessee.
      • Example 2: A mutual fund segregates a portfolio (serial 11). The cost of acquisition of units in the segregated portfolio is computed using X = A x B / C where A = cost of acquisition of units in total portfolio; B = NAV of asset transferred to segregated portfolio; C = NAV of total portfolio immediately before segregation.
      • Example 3: Shares acquired by a non-resident on redemption of GDRs (serial 6). Deemed cost = price of the shares on a recognised stock exchange on the date of request for redemption.

      Interplay

      The clause expressly cross-references numerous other provisions (various heads of section 70(1), section 17(2), section 67(14), section 352, section 92(2)(m), section 26(2)(j), SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2018/160). Interaction with those provisions is integral: the deemed cost outcomes depend on definitions and triggers in those sections and the SEBI circular. Other interactions (e.g., with capital gains indexing rules, cost inflation index, or exemptions) are Not stated in the document.

      Differences between the two provisions and practical impact

      • Reference to section on specified securities/sweat equity (Table entry 4): Bill (Clause 73) cites section 17(2); Act (Section 73) cites section 17(1)(d).
        • Practical impact: The amendment in the Act changes the statutory anchor for which category of specified securities or sweat equity shares the deemed cost rule applies. This can affect which instruments are valued at fair market value for cost purposes. (Precise reach of the change: Not stated in the document.)
      • Exclusion in entry regarding shares in a project (Table entry 20): Bill refers to "Capital asset, being share in the project, in the form of land or building, or both, u/s 67(14)"; Act adds the qualification "not being a capital asset referred to in section 67(16)".
        • Practical impact: The Act narrows the entry by excluding assets covered by section 67(16), thereby limiting the scope of the deemed cost rule under this entry. This reduces unintended coverage for assets specifically carved out by section 67(16). (Further detail: Not stated in the document.)
      • Provision for accreted income / fair market value reference (Table entry 21): Bill cites computation and tax paid as per section 352 and uses section 352(3) for the specified date; Act cites section 352 and uses section 352(2) for the specified date.
        • Practical impact: The Act shifts the cross-reference to a different sub-paragraph of section 352 for the relevant date when fair market value was considered for computation of accreted income. This may change the precise valuation date or procedural reference for trusts/institutions. (Exact date/implication: Not stated in the document.)
      • Formulation of formulae and minor drafting differences (Table entries 11 and 14): Bill expresses formulas as "X = A x B /C" and in entry 11 uses "immediately before segregation"; Act sets out formula in a two-line presentation "X = A x B / C" with explanatory punctuation and uses "immediately before segregation of portfolios" (slightly fuller wording).
        • Practical impact: These are drafting and clarity differences; the mathematical operation appears identical. The Act's fuller wording may reduce ambiguity about the temporal reference ("immediately before segregation of portfolios").
      • Wording differences in reduction language for original units/shares (Table entries 12 and 15): Bill uses shorter phrasing ("The cost of acquisition as reduced by..."; "As reduced by..."); Act uses fuller phrasing ("The cost of acquisition of such original units as reduced by..." and "The cost of acquisition of such original shares as reduced by...").
        • Practical impact: Primarily stylistic; the Act's phrasing is marginally clearer on subject of reduction being applied to the cost of acquisition of the original asset.
      • Cross-reference to cooperative bank business reorganisation (sub-section (2)(d)): Bill refers to section 65; Act refers to section 64.
        • Practical impact: The Act alters which section governs application "as far as may be" to co-operative bank reorganisations. This may change whether the listed rules apply to such reorganisations (scope depends on the substantive content of sections 64/65, which is Not stated in the document).
      • Minor wording elsewhere (e.g., serial 3 wording "in relation to which such asset is acquired by the assesse" in Act vs "for which such asset is acquired by the assesse" in Bill):
        • Practical impact: These are drafting refinements likely intended to improve grammatical clarity; they do not, on the face of the text, alter substantive effect.

      Practical Implications

      • Compliance and risk areas: Taxpayers receiving assets by non-purchase modes must trace the previous owner's cost of acquisition (serial 1). Where assets arise from reorganisations, taxpayers and advisers must apply the prescribed formulae to apportion cost (serials 11, 14). For instruments where fair market value is prescribed (serials 4, 17, 18, 21, 22), appropriate documentation of valuation date and valuation method is necessary. The clause delegates some definitional matters (e.g., SEBI definitions), so reliance on external circulars is required.
      • Record-keeping/evidence points: Maintain purchase records of previous owners where available; documents substantiating improvements; NAV statements and contemporaneous valuation data for mutual fund reorganisations; stock exchange prices on specified dates (e.g., GDR redemption date); records of tax paid and valuation dates u/s 352; records of disclosure and payment under the Income Declaration Scheme, 2016 where invoked.

      Key Takeaways

      • Clause 73 prescribes deemed cost of acquisition rules for a wide range of non-market transfers and restructurings.
      • General rule: the prior owner's cost (plus improvements) is carried forward in most non-purchase acquisitions.
      • Specific categories (amalgamation, demerger, segregations, consolidations) require mechanical apportionment/formulae to determine cost.
      • Certain instruments/assets use fair market value or market price on a specified date as deemed cost.
      • The clause cross-references several statutory provisions and a SEBI circular; precise application depends on those external texts.
      • Taxpayers must preserve evidence of prior costs, improvements, NAVs, market prices and valuation dates to support cost calculations.
      • Where the Bill uses concise phrasing, careful reading with the cross-references is necessary to determine operative dates and definitions.

      Full Text:

      Section 73 Cost with reference to certain modes of acquisition.

      Topics

      ActsIncome Tax