Amendment of section 45
17. In section 45 of the Income-tax Act, in sub-section (5), after clause (b), the following proviso shall be inserted with effect from the 1st day of April, 2015, namely:––
‘Provided that any amount of compensation received in pursuance of an interim order of a court, Tribunal or other authority shall be deemed to be income chargeable under the head “Capital gains” of the previous year in which the final order of such court, Tribunal or other authority is made;’.
Notes on Clauses:
Clause 17 of the Bill seeks to amend section 45 of the Income-tax Act relating to capital gains.
The existing provisions contained in section 45 provide for charging of any profits or gains arising from transfer of a capital asset. Sub-section (5) provides for taxation of capital gains arising from transfer by way of compulsory acquisition, where the compensation is enhanced or further enhanced by a court, Tribunal or other authority. Clause (b) of the said sub-section provides that where the amount of compensation is enhanced by any court, Tribunal or other authority, it shall be deemed to be income chargeable of the previous year in which amount is received by the assessee.
It is proposed to insert a proviso to said clause (b) of sub-section (5) of the aforesaid section, so as to provide that any amount of compensation received in pursuance of an interim order of a court, Tribunal or other authority shall be deemed to be income chargeable under the head “Capital gains” of the previous year in which the final order of such court, Tribunal or other authority is made.
This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years.
