Section 47(iv) & 47(v) - Transfer of a capital asset by a holding company to its 100% subsidiary company & vice versa - Income Tax - Ready Reckoner - Income Tax

Section Transaction not regarded as transfer What is the cost in the hands of transferee Period of Holding 47(iv) Transfer of a capital asset by a holding company to its 100% subsidiary company provided the subsidiary company is an Indian Company. Cost to the previous owner POH of previous owner shall also be considered. 47(v) Transfer of a capital asset by a 100% subsidiary company to its holding company provided the holding company is an Indian Company. Cost to the previous owner POH of previous owner shall also be considered. Section 47A : Withdrawal of Exemption :- In case of clause (vi) (v) of section 47 (Holding Co to Subsidiary Co.) and (Subsidiary Co. to Holding Co.), if within 8 years from the date of transfer. a. Such asset is converted in stock-in-trade by transferee Co. or b. Holding Co. cease to hold 100% share capital of subsidiary Co. then, exemption claimed earlier shall be withdrawn tax shall be charged to Transferor Co. in the PY in which transfer took place. - If sec 47A attracted then assessment of transferor Co. should be rectified u/s 154 . - If sec 47A is attracted then COA in hands of transferee Co. will be the price at which the asset was acquired Section 49(3) . Also, this exemption shall not be available if the capital asset is transferred as stock in trade.