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Home Acts & Rules Bill Bills FINANCE BILL, 2017 Chapters List Chapter III DIRECT TAXES - Income-tax This
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Clause 23 - Amendment of section 47. - FINANCE BILL, 2017

FINANCE BILL, 2017
Chapter III
DIRECT TAXES - Income-tax
  • Contents
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Amendment of section 47.

23. In section 47 of the Income-tax Act, with effect from the 1st day of April, 2018,-

(a) after clause (viia), the following clause shall be inserted, namely:-

“(viiaa) any transfer, made outside India, of a capital asset being rupee denominated bond of an Indian company issued outside India, by a non-resident to another non-resident;”;

(b) after clause (xa), the following clause shall be inserted, namely:-

“(xb) any transfer by way of conversion of preference shares of a company into equity shares of that company;”.

 



 

Notes on Clauses:

Clause 23 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer.

The said section provides that certain transfers of capital assets are not chargeable to tax under section 45 of the Act.

Further, under the existing provisions of clause (x) of the said section, any transfer by way of conversion of bonds or debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company is not regarded as transfer.

It is proposed to insert a new clause (viiaa) in section 47 so as to provide that any transfer made outside India of a capital asset being rupee denominated bond of Indian company issued outside India, by a non-resident to another non-resident shall not be regarded as transfer.

It is also proposed to insert a new clause (xb) in the said section so as to provide that the conversion of preference shares of a company into equity shares of that company shall also not be regarded as transfer.

These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.

 
 
 
 
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