Amendment of section 47
18. In section 47 of the Income-tax Act, with effect from the 1st day of April, 2015,––
(a) after clause (viia), the following shall be inserted, namely:––
‘(viib) any transfer of a capital asset, being a Government Security carrying a periodic payment of interest, made outside India through an intermediary dealing in settlement of securities, by a non-resident to another non-resident.
Explanation.––For the purposes of this clause, “Government Security” shall have the meaning assigned to it in clause (b) of section 2 of the Securities Contracts (Regulation) Act, 1956;[ 42 of 1956]’;
(b) after clause (xvi), the following shall be inserted, namely:––
‘(xvii) any transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust to the transferor.
Explanation.––For the purposes of this clause, the expression “special purpose vehicle” shall have the meaning assigned to it in the Explanation to clause (23FC) of section 10.’.
Notes on Clauses:
Clause 18 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer.
The existing provision contained in section 47 provides that certain transactions shall not be considered as transfer for the purpose of charging capital gains.
It is proposed to insert a new clause (viib) in the said section so as to provide that any transfer of a capital asset, being a Government Security carrying a periodic payment of interest, made outside India through an intermediary dealing in settlement of securities, by a non-resident to another non-resident shall not be considered as transfer for the purpose of charging capital gains. It is also proposed to define the term “Government Security”.
It is further proposed to amend the said section by inserting a new clause (vii) so as to provide that any transfer of a capital asset, being share of a special purpose vehicle, to a business trust in exchange of units allotted by that trust to the transferor shall not be regarded as transfer for the purposes of section 45. The special purpose vehicle will have the same meaning as provided in Explanation to clause (23FC) of section 10.
This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years.
