CHAPTER III
DIRECT TAXES
Income-tax
Amendment of section 2.
3. In section 2 of the Income-tax Act,––
(i) in clause (13A), with effect from the 1st day of April, 2021,––
(a) in sub-clause (ii), the word “and” occurring at the end shall be omitted;
(b) the long line shall be omitted;
(ii) in clause (42A), in Explanation 1, in clause (i), after sub-clause (hg), the following sub-clause shall be inserted, namely:––
“(hh) in the case of a capital asset, being a unit or units in a segregated portfolio referred to in sub-section (2AG) of section 49, there shall be included the period for which the original unit or units in the main portfolio were held by the assessee;”.
Notes on Clauses:
Clause 3 of this Bill seeks to amend section 2 of the Income-tax Act relating to definitions.
Clause(13A) of the said section defines “business trust” to mean a trust registered as an Infrastructure Investment Trust under the Securities Exchange Board of India (Infrastructure Investment Trusts) Regulation, 2014 or a Real Estate Investment Trust under the Securities Exchange Board of India (Real Estate Investment Trusts) Regulation, 2014 made under the Securities and Exchange Board of India Act, 1992, whose units are required to be listed on a recognised stock exchange in accordance with the aforesaid regulations.
It is proposed to amend the said clause so as to omit the long line relating to the requirement of listing of the business trust from recognised stock exchange in accordance with the regulations made by the Securities Exchange Board of India.
This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years.
Clause(42A) of the said section defines the expression “short term capital asset” to be capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. Further Explanation to the said clause provides for determining the period for which the capital asset is held by the assessee.
It is proposed to amend clause (i) of the said Explanation so as to insert sub-clause (hh) to provide that in the case of a capital asset, being a unit or units in a segregated portfolio, referred to in sub-section (2AG) of section 49, there shall be included the period for which the original unit or units in the main portfolio were held by the assessee.
This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.
