Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Statutory Provisions

Home Acts & Rules Bill Bills FINANCE BILL, 2015 Chapters List Chapter III DIRECT TAXES - Income-tax This

Clause 14 - Amendment of section 49. - FINANCE BILL, 2015

FINANCE BILL, 2015
Chapter III
DIRECT TAXES - Income-tax
  • Contents

Amendment of section 49.

14. In section 49 of the Income-tax Act, with effect from the 1st day of April, 2016,-

(I) in sub-section (1), in clause (iii), in sub-clause (e), for the words, brackets, figures and letters

“or clause (viaa) or clause (vica) or clause (vicb)”, the words, brackets, figures and letters “or clause (viaa) or clause (viab) or clause (vib) or clause (vica) or clause (vicb) or clause (vicc)” shall be substituted;

(II) after sub-section (2AC), the following sub-section shall be inserted, namely:-

           “(2AD) Where the capital asset, being a unit or units in a consolidated scheme of a mutual fund, became the property of the assessee in consideration of a transfer referred to in clause (xviii) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the unit or units in the consolidating scheme of the mutual fund.”.

 



 

Notes on Clauses:

Clause 14 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 sub-section (1) of the aforesaid section provide that where the capital asset became the property of the assessee under certain situations the cost of acquisition of the asset shall be deemed to be cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be.

It is proposed to amend sub-clause (e) of clause (iii) of said sub-section (1) so as to include the transfer referred to in clause (vib) of section 47.

It is proposed to amend the aforesaid sub-clause (e) to provide for determination of cost of acquisition in respect of shares or interest of foreign company or entity in certain cases.

It is also proposed to amend the said section so as to provide that where the capital asset, being a unit or units in a consolidated scheme of a mutual fund, became the property of the assessee in consideration of a transfer referred to in clause (xviii) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the unit or units in the consolidating scheme of the mutual fund.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years.

 
 
 
 

Quick Updates:Latest Updates