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Transfer of Capital Asset - Section 2(47) - Income Tax - Ready Reckoner - Income TaxExtract TRANSFER OF CAPITAL ASSET [ SECTION 2(47) ] Transfer in relation to a capital asset, includes Sale, exchange or relinquishment of the asset or The extinguishment of any rights therein or The compulsory acquisition thereof under any law, or Conversion of capital asset into stock in trade, or Allowing the possession of any immovable property to be taken or retained in part performance of a contract; or Any transaction (like becoming member of, or acquiring shares in a Co. operative society) which has the effect of transferring or enabling the enjoyment of immovable property; or The redemption or maturity of zero coupon Bonds (ZCB); or The possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. Notes :- transfer also includes disposing of or parting with an asset or interest therein or creating any interest in any asset in any manner whatsoever either directly or indirectly, absolutely or conditionally voluntarily or involuntarily by way of an agreement or otherwise. Reduction of share capital by company by reducing face value of its shares and paying off balance to shareholder would result in extinguishment of proportionate right in shares held by shareholder hence attracts capital gain. Redemption of listed preference shares amounts to transfer and will result in capital gains in the hands of preference shareholder.
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