Amendment of section 55.
31. In section 55 of the Income-tax Act, with effect from the 1st day of April, 2024,––
(a) in sub-section (1), in clause (b), in sub-clause (1),––
(i) after the word “goodwill”, the words “or any other intangible asset” shall be inserted;
(ii) after the word “profession”, the words “or any other right” shall be inserted;
(b) in sub-section (2), in clause (a),––
(i) for the words “profession, or a right”, the words “profession, or any other intangible asset or a right” shall be substituted;
(ii) for the word “hour,”, the words “hour, or any other right” shall be substituted.
Notes on Clauses:
Clause 31 of the Bill seeks to amend section 55 of the Income-tax Act relating to meaning of “adjusted”, “cost of improvement” and “cost of acquisition”.
The provisions of the said section, inter alia, defines the expressions ‘cost of any improvement’ and ‘cost of acquisition’ for the purposes of computing capital gains. However, there are certain assets like intangible assets or any other right for which no consideration has been paid for acquisition, and the transfer of which may result in generation of any income or could be converted into any profit or gain, but the cost of acquisition for such assets is not clearly defined as ‘nil’ in the present provision.
It is proposed to amend the said section to insert expression “or intangible asset or any other right” in the definitions of “cost of any improvement” and “cost of acquisition”.
This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.