CHAPTER III
DIRECT TAXES
Income-tax
Amendment of section 49.
20. In section 49 of the Income-tax Act,—
(a) in sub-section (1), in clause (iii), in sub-clause (e), for the words, brackets, figures and letters "clause (vicb) of section 47", the words, brackets, figures and letters "clause (vicb) or clause (xiiib) of section 47" shall be substituted with effect from the 1st day of April, 2011;
(b) in sub-section (4), after the word, brackets and figures "clause (vii)", at both the places where they occur, the words, brackets, figures and letter "or clause (viia)" shall be inserted with effect from the 1st day of June, 2010.
Notes on Clauses:
Clause 20 of the Bill seeks to amend section 49 of the Income tax Act relating to cost with reference to certain modes of acquisition.
The existing provisions contained in the aforesaid section provide that in certain circumstances the cost of acquisition of the assets shall be deemed to be the cost for which the previous owner of the asset acquired it.
Sub-clause (a) proposes to amend sub-clause (e) of clause (iii) of sub-section (1) of the aforesaid section so as to make a reference of clause (xiiib) of section 47 in the said sub-clause (e) to provide that in case of succession of a private company or unlisted public company by a limited liability partnership, the cost of acquisition of the assets for the successor limited liability partnership shall be deemed to be the cost for which the predecessor company acquired it.
This amendment will take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-2012 and subsequent years.
Under the existing provision contained in sub-section (4) of section 49, where the capital gain arises from the transfer of a property, the value of which has been subject to income-tax under clause (vii) of sub-section (2) of section 56, the cost of acquisition of such property shall be deemed to be the value which has been taken into account for the purposes of the said clause (vii).
Sub-clause (b) proposes to amend the aforesaid sub-section so as to provide that the cost of acquisition of such property shall be deemed to be the value which has been taken into account for the purpose of clause (viia) of sub-section (2) of section 56 also.
This amendment is consequential to the amendment made vide sub-clause (b) of clause 21 of the Bill and will take effect from 1st June, 2010 and will, accordingly, apply to the assessment year 2011-2012 and subsequent years.
