17. Amendment of section 47.
In section 47 of the Income-tax Act, after clause (viiaa) [as inserted by section 23 of the Finance Act, 2017 (7 of 2017)], the following clause shall be inserted with effect from the 1st day of April, 2019, namely:-
‘(viiab) any transfer of a capital asset, being-
(a) bond or Global Depository Receipt referred to in sub-section (1) of section 115AC; or
(b) rupee denominated bond of an Indian company; or
(c) derivative,
made by a non-resident on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in foreign currency.
Explanation.- For the purposes of this clause,-
(a) “International Financial Services Centre” shall have the meaning assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) “recognised stock exchange” shall have the meaning assigned to it in clause (ii) of Explanation 1 to clause (5) of section 43;
(c) “derivative” shall have the meaning assigned to it in clause (ac) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).’.
Notes on Clauses:
Clause 17 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 to be regarded as transfer for the purposes of section 45 of the Income-tax Act.
It is proposed to insert a new clause (viiab) in the said section so as to provide that any transfer of a capital asset, being bond or Global Depository Receipt referred to in sub-section (1) of section 115AC or rupee denominated bond of an Indian company or derivative, made by a non-resident on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in foreign currency, shall not be regarded as transfer.
It is further proposed to define certain expressions used therein.
This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.
