Amendment of section 47.
28. In section 47 of the Income-tax Act, with effect from the 1st day of April, 2017,- (A) after clause (viib), the following clause shall be inserted, namely:-
“(viic) any transfer of Sovereign Gold Bond issued by the Reserve Bank of India under the Sovereign Gold Bond Scheme, 2015, by way of redemption, by an assessee being an individual;”;
(B) in clause (xiiib), in the proviso,-
(I) in clause (e), the word “and” appearing at the end shall be omitted;
(II) after clause (e), the following clause shall be inserted, namely:-
“(ea) the total value of the assets as appearing in the books of account of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed five crore rupees; and;”;
(C) after clause (xviii), the following clause shall be inserted with effect from the 1st day of April, 2017, namely:-
‘(xix) any transfer by a unit holder of a capital asset, being a unit or units, held by him in the consolidating plan of a mutual fund scheme, made in consideration of the allotment to him of a capital asset, being a unit or units, in the consolidated plan of that scheme of the mutual fund.
Explanation.-For the purposes of this clause,-
(a) “consolidating plan” means the plan within a scheme of a mutual fund which merges under the process of consolidation of the plans within a scheme of mutual fund in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) “consolidated plan” means the plan with which the consolidating plan merges or which is formed as a result of such merger;
(c) “mutual fund” means a mutual fund specified under clause (23D) of section 10.’.
Notes on Clauses:
Clause 28 of the Bill seeks to amend section 47 of the Income tax Act relating to transactions not regarded as transfer.
Sub-clause (A) of said clause seeks to insert a new clause (viic) in the said section so as to provide that any redemption of Sovereign Gold Bond issued by the Reserve Bank of India under the Sovereign Gold Bond Scheme, 2015, by an assessee being an individual shall not be considered as transfer.
Sub-clause (B) of the said clause seeks to insert a new clause (ea) in clause (xiiib) of the said section so as to provide a condition in addition to the existing conditions, that the value of the total assets in books of accounts of the company in any of the three previous years preceding the previous year in which its conversion into Limited Liability Partnership takes place does not exceed five crore rupees.
Sub-clause (C) of the said clause seeks to insert a new clause (xix) in the said section so as to provide that any transfer by a unit holder of a capital asset, being a unit or units, held by him in the consolidating plan of a mutual fund scheme, made in consideration of the allotment to him of a capital asset, being a unit or units, in the consolidated plan of that scheme of the mutual fund shall not be considered as transfer for capital gain tax purposes.
It is also proposed to define the expressions “consolidating plan”, “consolidated plan” and “mutual fund” for the purposes of the proposed clause (xix).
These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017- 2018 and subsequent assessment years.
