TRANSACTIONS WHICH ARE INCLUDED IN DEFINITION OF TRANSFER UNDER CAPITAL ASSET

 16/02/2019

TRANSACTIONS WHICH ARE INCLUDED IN DEFINITION OF TRANSFER UNDER CAPITAL ASSET ( Author - Admin )

The following transactions are also included in "transfer" :-

• By an amendment made by the Taxation Laws (Amendment) Act, 1984, the definition of "transfer" was enlarged, with effect from the assessment year 1985-86, to provide that, in a case where a capital asset isconverted by the owner thereof into (or is treated by him as) stock-in-trade of a business carried on by him, such conversion (or treatment of) the capital asset shall also be regarded as a “transfer” of the asset.

• The definition of transfer of capital asset under section 2( 47) was extended with effect from the assessment year 1988-89 to include the following transactions : 

a. any transaction involving the allowing of the possession of any immovable property to be taken retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882; and 

b. any transaction (whether by way of becoming a member of, or acquiring shares in a co~operative society, company or other association of persons or by way of agreement or any arrangement or tn any Other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, any immovable property. 

For the aforesaid purposes, ”immovable property" shall have the same meaning as in clause ((1)of section 269 UA. 

• With effect from the assessment year 2006-07, maturity/redemption of zero coupon bonds is treated as “transfer". 

• "Transfer" includes disposing of, or parting with, an asset (or any interest therein) or creating any interest in any  asset in any manner whatsoever (directly or indirectly, absolutely or conditionally, voluntarily or in voluntarily), by way of an agreement (whether entered into in India or outside India) or otherwise. This rule is applicable even if such transfer of rights has been characterised as being effected or dependent upon or Following from the transfer of a share (or shares) in a company registered or incorporated outside India applicable with retrospective effect from the assessment year 1962-63 onwards)

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