Amendment of section 48.
24. In section 48 of the Income-tax Act, with effect from the 1st day of April, 2018,-
(a) in the fifth proviso, for the word “subscribed”, the word “held” shall be substituted;
(b) in the Explanation, in clause (iii), for the figures, letters and words “1st day of April, 1981”, the figures, letters and words “1st day of April, 2001” shall be substituted.
Notes on Clauses:
Clause 24 of the Bill seeks to amend section 48 of the Income-tax Act relating to mode of computation.
The fifth proviso to the said section provides that in case of an assessee being a non-resident, any gains arising on account of appreciation of rupee against a foreign currency at the time of redemption of rupee denominated bond of an Indian company subscribed by him, shall be ignored for the purposes of computation of full value of consideration.
Further, under the existing provisions of the said section, "indexed cost of acquisition" is defined to be an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981, whichever is later.
It is proposed to amend the said proviso so as to provide that in case of an assessee being a non-resident, any gains arising on account of appreciation of rupee against a foreign currency at the time of redemption of rupee denominated bond of an Indian company held by him, shall be ignored for the purposes of computation of full value of consideration.
It is also proposed to make consequential amendments to the said section so as to replace the reference of 1st day of April, 1981 with the 1st day of April, 2001.
These amendments will take effect from 1st April, 2018 and will, accordingly, apply to the assessment year 2018- 2019 and subsequent years.
