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    Act RulesBills
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    Act RulesBills
    Determination of cost of specified transfers u/s 49 - the transfer of an asset, being the asset held...
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    Deemed cost of acquisition set as fair market value where accreted income is taxed under Chapter XIIEB.
    Where capital gain arises from transfer of an asset held by a trust or institution for which accreted income has been computed and tax paid under Chapter XIIEB, the cost of acquisition of that asset shall be deemed to be the fair market value taken into account for computing accreted income as on the specified date referred to in sub section (2) of section 115TD.
    Act RulesBills
    Determination of cost of specified transfers u/s 49 - Transfer in casa of Land Pooling Scheme cover...
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    Cost of acquisition tied to stamp duty value for land pooling allotments determining capital gains computation.
    Where capital gains arise from transfer of a specified capital asset received under the Andhra Pradesh Capital City Land Pooling Scheme and transferred after two years from the end of the financial year in which possession was handed over, the cost of acquisition shall be deemed to be the stamp duty value of the asset as on the last day of the second financial year after the end of the financial year when possession was handed over; the amendment also defines "stamp duty value."
    Act RulesBills
    Determination of cost of specified transfers u/s 49 - transfer of land or building under a specified...
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    Cost of acquisition set as deemed full value of consideration for project-share transfers under development agreements, effective 2018-19.
    The amendment provides that the cost of acquisition of a share in a project consisting of land or building, given as consideration under specified agreements (for example, joint development agreements), shall be the amount deemed as the full value of consideration under the related provision, subject to the proviso excluding certain capital assets, and applies prospectively from the effective date for subsequent assessment years.
    Act RulesBills
    Determination of cost of specified transfers u/s 49 - in case of conversion of preference shares of ...
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    Deemed cost of acquisition: equity received on conversion of preference shares treated as costing the original preference shares.
    A new deeming provision treats the cost of acquisition of equity shares received in consideration of a transfer under clause (xb) of section 47 as the cost of the preference shares in relation to which those equity shares are acquired, thereby carrying over the preference share cost for computing capital gains.
    Act RulesBills
    Determination of cost of specified transfers u/s 49 - in case of any transfer by a unit holder of a ...
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    Cost of acquisition rule: consolidated-plan unit transfers deemed to carry forward cost from consolidating-plan units, affecting capital gains.
    The amendment deems the cost of acquisition of a capital asset comprising unit(s) in a consolidated mutual fund plan to be the cost of acquisition of the corresponding unit(s) in the consolidating plan when the consolidated units were obtained by a specified transfer, thereby fixing the cost basis for capital gains computation.
    Act RulesBills
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    Cost basis for demerger transfers: previous owner's acquisition cost to determine transferee's cost for share transfers.
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    Amendment revises the benchmark year used in the computation of the indexed cost of acquisition by replacing the earlier base-year reference with a more recent base year, with consequential changes to the mode of computation and prospective application to the stated assessment year and subsequent years, thereby altering the use of the Cost Inflation Index in proportionately adjusting cost of acquisition for capital gains.
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    The Bill inserts a provision that any transfer made outside India of a capital asset consisting of a rupee denominated bond of an Indian company issued outside India, where both transferor and transferee are non residents, shall not be regarded as transfer for capital gains purposes; this change complements existing non recognition for conversion of bonds into shares and applies prospectively from the operative year specified in the Bill.
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    Restriction on cash payments: non banked payments above the prescribed limit are nondeductible and may be taxable.
    Amendment lowers the cash payment threshold for deductibility from twenty thousand rupees to ten thousand rupees per person per day and requires payments above that limit to be made by account payee cheque, account payee bank draft, or electronic clearing through a bank account; amounts paid otherwise will be disallowed as deductions or deemed to be profits and gains of business or profession. Consequential changes to related sub provisions are also proposed, effective 1 April 2018 for the relevant assessment year.

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      Capital Gains - conversion of preference shares of a company into equity shares of that company shall also not be regarded as transfer - Budget 2017-18 w.e.f. AY 2018-19

      3 February, 2017

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      Clause - 023 - Amendment of section 47.

      THE FINANCE BILL, 2017

      Clause 23 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer.

      The said section provides that certain transfers of capital assets are not chargeable to tax under section 45 of the Act.

      Further, under the existing provisions of clause (x) of the said section, any transfer by way of conversion of bonds or debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company is not regarded as transfer.

      It is also proposed to insert a new clause (xb) in the said section so as to provide that the conversion of preference shares of a company into equity shares of that company shall also not be regarded as transfer.

      These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.

       

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