16/02/2019

TRANSACTIONS WHICH ARE NOT INCLUDED IN DEFINITION OF TRANSFER UNDER CAPITAL ASSET ( Author - Admin )


Certain transactions not included In transfer For the purpose of section 45, the following transactions are not regarded as transfers :

a. distribution of assets in kind by a company to its shareholders on its liquidation [sec. 46(1)]; 

b. any distribution of capital assets in kind by a Hindu undivided family to its members at the time of total or partial partition    [sec. 47(1)]; 

c. any transfer of capital asset under a gift or a will or an irrevocable trust [sec. 47(iii)] [transfer under gift or an irrevocable trust of a capital asset being shares, debentures or warrants allotted by a company directly or indirectly, to its employees under the Employees' Stock Option Plan or Scheme framed ir. accordance with guidelines issued by the Central Government shall be deemed as “transfer”, from the assessment year 2001-02”]; 

d. any transfer of a capital asset by a company to its wholly-owned Indian subsidiary company [sec. 47(iv)]

e. any transfer of a capital asset by a wholly-owned subsidiary company to its Indian holding company [sec 47( v)]

f. any transfer, in a scheme of amalgamation, of a capital asset by the amalgamating company to the amalgamated company, if the latter company is an Indian company [sec.47(vi)]

g. any transfer of shares in Indian company held by a foreign company to another foreign company in pursuance of a scheme of amalgamation between the two foreign companies, if at least 25 per cent of the shareholders of the amalgamating foreign company continue to remain shareholders of the amalgamated foreign company and such transfer does not attract tax on capital gains in the country. in which the amalgamating company is incorporated; [sec.47(via)] 

h. transfer in a scheme of amalgamation of a banking company with a banking institution [sec. 47(viaa). applicable from the assessment year 2006-07]; 

i. any transfer, in a scheme of amalgamation. of a capital asset, being a share of a foreign company. referred to in Explanation 5 to section 9( 1 )(1), which derives, directly or indirectly, its value substantially from the share or shares of an Indian company. held by the amalgamating foreign company to the amalgamated foreign company, if

• at least 25 per cent of the shareholders of the amalgamating foreign company continue to remain shareholders of the amalgamated foreign company; and 

• such transfer does not attract tax on capital gains in the country in which the amalgamating company is incorporated [sec. 47(viab)] (applicable from the assessment year 2016-17); 

j. any transfer in a demerger of a capital asset by the demerged company to resulting company provided that resulting company is an Indian company [sec. 47( vib), applicable from the assessment year 2000-01]: 

k. any transfer of shares held in an Indian company by a demerged foreign company to the resulting foreign company if the following conditions are satisfied:

• the shareholders holding not less than three fourths in value of the shares of the demerged foreign company continue to remain shareholders of the resulting foreign compan)‘; and 

• such transfer does not attract tax on capital gains in the country, in which the demerged foreign company is incorporated [sec. 47(vic), applicable from the assessment year 2000~01]; 

l. any transfer in a business reorganization of co-operative banks, of a capital asset by the predecessor to the successor [sec. 47(vica), applicable from the assessment year 2008-09]: 

m. any transfer by a shareholder, in a business reorganization of co-operatiye banks, of a capital asset being a share or shares held by him in predecessor if the transfer is made in consideration of the allotment to him of any share or shares in successor [sec. 47(vicb), applicable from the assessment year 2008-09]; 

n. any transfer in a demerger, of a capital asset, being a share of a foreign company, referred to in Explanation 5 to section 9(1)(z), which derives, directly or indirectly, its value substantially from the share or shares of an Indian company, held by the demerged foreign company to the resulting foreign company, if,

• the shareholders, holding not less than 75 per cent in value of the shares of the demerged foreign company, continue to remain shareholders of the resulting foreign company; 

• such transfer does not attract tax on capital gains in the country in which the demerged foreign company is incorporated; and 

• the provisions of sections 391 to 394 of the Companies Act, 1956 shall not apply in case of demerger given above [sec. 47(vicc)] (applicable from the assessment year 2016-17); 

o. any transfer or issue of shares by the resulting company in a scheme of demerger to the shareholders of the demerged company if the transfer or issue is made in consideration of demerger of the undertaking [sec. 47(vid), applicable from the assessment year 2000-01]; 

p. any transfer by a shareholder, in a scheme of amalgamation of share(s) held by him in the amalgamating company, if the transfer is made in consideration of the allotment to him of any share(s) in the amalgamated company" and the amalgamated company is an Indian company [sec. 47(viz)]; 

q. the transfer of a capital asset by a non-resident of such foreign currency convertible bonds or Global Depository Receipts as are referred to in sub-scction (1) of section 115AC held by him to another nonreSIdent where the transfer is made outside India [sec.47(viaa)]

r. any transfer, made outside India, of a capital asset being rupee denominated bond of an Indian company issued outside India,)’ a non-resident to another non-resident [sec. 47(viiaa)] (applicable from the assessment year 2018-19).

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