Amendment of section 56
25. In section 56 of the Income-tax Act, in sub-section (2), after clause (viii), the following clause shall be inserted with effect from the 1st day of April, 2015, namely:—
“(ix) any sum of money received as an advance or otherwise in the course of negotiations for transfer of a capital asset, if,––
(a) such sum is forfeited; and
(b) the negotiations do not result in transfer of such capital asset.”.
Notes on Clauses:
Clause 25 of the Bill seeks to amend section 56 of the Income-tax Act relating to income from other sources.
It is proposed to insert a new clause (ix) in sub-section (2) of the aforesaid section so as to provide that where any sum of money, received as an advance or otherwise in the course of the negotiations for transfer of a capital asset, is forfeited and the negotiations do not result in transfer of such capital asset, then, such sum shall be chargeable to income-tax under the head “income from other sources”.
This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years.
