This document provides an overview of key concepts related to capital gains tax in India. It discusses what constitutes a capital asset and capital gains, the distinction between short-term and long-term capital assets and gains, the meaning of "transfer" which triggers capital gains, exemptions from capital gains tax, the year of taxability, and how to compute capital gains and the cost of acquisition and improvement. The document contains detailed explanations and examples for many capital gains tax concepts.
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar we shall look at computation of capital gains in specific cases such as Insurance compensation, Compulsory acquisition, Distribution of Assets, Slump Sale and the provisions in case of sale of Depreciable Assets. We will also look at provisions which provide for full value of consideration in certain cases. Finally, the Webinar will touch upon relevant Judicial Precedents.
Finance Bill, 2018 Amendments Passed by the Lok SabhaUpasanaTaxmann
The Lok Sabha on Wednesday passed the Finance Bill, 2018 amendments. Here're the snippets of changes made in finance bill, 2018. For more information visit https://www.taxmann.com/.
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...DVSResearchFoundatio
Key Takeaways:
- Analysis of section 45(4), section 9B of the Income Tax Act and Rule 8AA and Rule 8AB of Income Tax Rules
- Illustrations to understand the relevant impact
- Critical Issues concerned with the provisions
SEBI(LODR)Regulations - Obligations on listing of specified securities - Part IIDVSResearchFoundatio
Key Takeaways:
Related party transactions
Obligations of directors including independent directors, employees including KMPs
Corporate Governance requirements
Presentation on industry perspective of listing regulations by CS Ahalada Rao V janyandkavi
This document discusses key aspects of SEBI's (Listing Obligation and Disclosure Requirements) Regulations, 2015 from an industry perspective. Some key points discussed include:
- The regulations consolidate various listing compliance provisions, apply to all types of securities listed, and expand disclosure and transparency coverage.
- Notable changes include transforming listing obligations from contractual to legal requirements and increasing penalties for non-compliance.
- Some regulations are principles-based rather than rules-based, requiring compliance with both the letter and spirit of the law.
- There are both similarities and contradictions with the Companies Act, 2013 regarding definitions, timelines, and financial reporting.
- New concepts introduced include definitions for material subsid
Objectives & Agenda :
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar, we will discuss the basics of Capital Gains starting from the Charging Provision. We will understand the meaning of capital asset, meaning of transfer, the types of capital gains, how to compute capital gains and how it arises in specified cases. Finally, the Webinar will touch upon relevant Judicial Precedents.
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar we shall look at computation of capital gains in specific cases such as Insurance compensation, Compulsory acquisition, Distribution of Assets, Slump Sale and the provisions in case of sale of Depreciable Assets. We will also look at provisions which provide for full value of consideration in certain cases. Finally, the Webinar will touch upon relevant Judicial Precedents.
Finance Bill, 2018 Amendments Passed by the Lok SabhaUpasanaTaxmann
The Lok Sabha on Wednesday passed the Finance Bill, 2018 amendments. Here're the snippets of changes made in finance bill, 2018. For more information visit https://www.taxmann.com/.
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...DVSResearchFoundatio
Key Takeaways:
- Analysis of section 45(4), section 9B of the Income Tax Act and Rule 8AA and Rule 8AB of Income Tax Rules
- Illustrations to understand the relevant impact
- Critical Issues concerned with the provisions
SEBI(LODR)Regulations - Obligations on listing of specified securities - Part IIDVSResearchFoundatio
Key Takeaways:
Related party transactions
Obligations of directors including independent directors, employees including KMPs
Corporate Governance requirements
Presentation on industry perspective of listing regulations by CS Ahalada Rao V janyandkavi
This document discusses key aspects of SEBI's (Listing Obligation and Disclosure Requirements) Regulations, 2015 from an industry perspective. Some key points discussed include:
- The regulations consolidate various listing compliance provisions, apply to all types of securities listed, and expand disclosure and transparency coverage.
- Notable changes include transforming listing obligations from contractual to legal requirements and increasing penalties for non-compliance.
- Some regulations are principles-based rather than rules-based, requiring compliance with both the letter and spirit of the law.
- There are both similarities and contradictions with the Companies Act, 2013 regarding definitions, timelines, and financial reporting.
- New concepts introduced include definitions for material subsid
Objectives & Agenda :
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar, we will discuss the basics of Capital Gains starting from the Charging Provision. We will understand the meaning of capital asset, meaning of transfer, the types of capital gains, how to compute capital gains and how it arises in specified cases. Finally, the Webinar will touch upon relevant Judicial Precedents.
The document provides details about various exemptions available under the Indian Income Tax Act for capital gains. It discusses sections 54, 54B, 54D, 54EC, 54EE, 54F, 54G, 54GA and 54GB which provide exemption from capital gains tax if the amount of capital gains is invested in specified assets within prescribed time limits. Key conditions, timelines and consequences of not meeting the conditions are explained for each section. The document also covers capital gains tax rates and provisions for non-residents.
The document presents an overview of the Companies (Auditor's Report) Order, 2015, which outlines new reporting requirements for company auditors. It discusses the applicability and exceptions of the Order, changes from the previous 2003 Order, and the specific reporting requirements for auditors regarding issues like fixed assets, inventory, loans, internal controls, statutory dues, and more. The Order aims to enhance transparency through more robust auditing and reporting on key financial and compliance matters by company auditors.
This document provides information about an auditor's report, including:
- The duties of an auditor include preparing an audit report for company members, making required disclosures in the report, and giving reasons for qualifications.
- An auditor's report must state whether the financial statements provide a true and fair view of the company's affairs and include comments on various matters like books of account and accounting standards.
- CARO (Companies Auditor's Report Order) places additional reporting requirements on auditors regarding companies' fixed assets, inventories, loans to related parties, internal controls, public deposits, and other financial matters.
Objectives & Agenda :
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar we shall look at various types of transfers which are exempted from capital gains, cost of acquisition in certain specified cases, capital gains on specified assets and finally, capital gains in case of non-residents. Also, the Webinar will touch upon relevant Judicial Precedents.
The document discusses the impact of adopting Indian Accounting Standards (Ind AS) for automobile companies. It covers key areas like revenue recognition, provisions, hedging, securitizations, deferred tax, embedded derivatives, product development costs, and property, plant and equipment. The overview section explains the transition process to Ind AS, including the requirement for an explicit compliance statement, accounting policy choices, and preparation of an opening Ind AS balance sheet. It also discusses exemptions available, such as the use of deemed cost for property valuations and relief from restating cumulative translation differences.
The document discusses capital gains tax in India. Some key points:
- Profits from the sale of a capital asset are taxed as capital gains and deemed as income in the year the asset is transferred.
- A capital asset is broadly defined as property including both movable and immovable assets, tangible and intangible. Certain assets like stock, personal effects, and agricultural land up to certain limits are excluded.
- Capital assets held for over 36 months are considered long-term, while those held for less than 36 months are short-term. Different tax rates apply to long-term versus short-term capital gains.
- Various transactions like distributions on partition of HUF, gifts, transfers
The document compares the proposed Companies (Auditor's Report) Order, 2016 (CARO 2016) with the existing CARO 2015. Some key changes proposed in CARO 2016 include:
- Expanding the applicability to include foreign companies.
- Raising the thresholds for certain exempted companies.
- Requiring auditors to report on whether title deeds of immovable property are held in the company's name.
- Lowering the threshold for reporting overdue loans from Rs. 5 lacs to Rs. 1 lac.
- Clarifying reporting requirements on statutory dues and disputes.
- Specifying the commencement date as the date of publication in the official gazette.
This document outlines the key changes made to the CARO (Companies Auditor's Report Order) reporting requirements in India. It summarizes the evolution from the CARO 2003 to CARO 2015, including changes made to the number of reporting points (from 21 to 12) and the relevant sections of the Companies Act that govern the order. It also provides definitions of key terms like One Person Company, Small Company, and outlines the 12 points that are required to be reported under CARO 2015, such as maintenance of accounts, statutory dues, loans, internal controls, and fraud.
MSB's PPT on Board's report under the Companies Act, 2013Manoj Singh Bisht
The document provides guidance on the requirements for a Board's Report under the Companies Act, 2013. It discusses each item that must be included in the report as per Section 134, such as the number of board meetings held, the company's dividend policy, details of related party transactions, and the director's responsibility statement. The document also provides clarification on certain items, such as what constitutes a "material" related party transaction for disclosure purposes. Overall, the summary provides a high-level overview of the key contents and statutory requirements of a Board's Report under the Companies Act, 2013 in India.
As per the requirements of said Regulation we have devised our Articles in following part:
1. Checklist for stock exchanges submission;
2. Checklist for shareholders communication
3. Penalty for non-compliance of LODR
4. SEBI FAQs for LODR
5. Board Meeting Tasks
6. Board shall ensure
Which would help you to comply with the requirement of said new regultion for the compliances due after the quarter ended on 31st December, 2015.
ASSESMENT OF THE IMPACT OF IND AS on TelcosHARIT MANKAD
The document discusses the impact of adopting Indian Accounting Standards (Ind AS) for telecom companies in India. Some of the key areas that will be impacted for telecom companies include:
1) Accounting for revenue, spectrum licenses, indefeasible rights of use, property and equipment.
2) Accounting for deferred tax assets and liabilities.
3) Adoption of Ind AS 101 provides exemptions from retrospective application, including the use of fair value as deemed cost for property, plant and equipment.
4) Preparation of an opening Ind AS balance sheet as of the transition date and provision of comparative information will be required.
SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 – HIGH...FCS BHAVIK GALA
This article provides highlights and analysis of the recently notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued by SEBI.
This is 2nd part of IND AS 101 PPT.
I already shared Part 1 few days ago.
In Part 1 full map of IND 101 was there while in Part 2 the portion of Exemptions & Prohibitions on retrospective applications of some aspects of IND Ass has been summarised.
This is most useful for the quick view of practical applicability of IND AS 101.
Thanks!!
Chitranshu Rahul Srivastava
CA, IFRS
The document provides an assessment of the impact of adopting Indian Accounting Standards (Ind AS/IFRS) on the e-commerce sector in India.
1. Key areas that will be impacted for e-commerce companies under Ind AS include accounting for revenue, private equity funding, intangible assets, property/equipment, deferred taxes, and financial instruments.
2. E-commerce businesses operate under two main models - the marketplace model and the inventory-based (B2C) model. Accounting differs between these models.
3. Ind AS 101 provides exemptions and exceptions from full retrospective application that e-commerce companies can utilize, such as using carrying values for assets from previous GAAP and not
1. The document discusses various aspects related to capital gains tax in India including understatement of consideration, reference to valuation officers, transfers between partners and firms, family arrangements, computation of capital gains, and short term versus long term capital assets.
2. It explains the powers of assessing officers to refer cases to valuation officers if the stated consideration is lower than fair market value and the consequences if the valuation officer arrives at a higher value.
3. The treatment of various transfers like between partners and firms, conversion of assets, insurance claims, and retirement of partners is explained citing relevant case laws and tax law sections.
The document summarizes the key changes introduced in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which came into effect in December 2015. Some of the major changes include more stringent corporate governance requirements for listed companies, mandatory registration of share transfer agents with SEBI, enhanced disclosure obligations for events and financial results, restrictions on reclassification of promoters, and new provisions regarding dividend payments, preservation of documents, and responsibilities of stock exchanges. The regulations aim to consolidate various listing requirements for different types of securities into a single document to improve transparency and protect investor interests.
The document discusses changes to the CARO reporting framework under the Companies Act 2013. Key changes include additional reporting requirements on the disposal of substantial fixed assets, loans taken by the company, transactions with directors, internal audits, compliance with special statutes, and details of funds raised and end use of money. New reporting requirements were also added regarding the transfer of amounts to the Investor Education and Protection Fund and adequate internal controls for the sale of services. The auditor must now verify records of fixed assets, physical verification processes, loans and advances, internal controls, statutory compliance, and defaults among other issues.
How capital gain is to be computed when superstructure (building) less than 3...D Murali ☆
How capital gain is to be computed when superstructure (building) less than 3 years old and constructed on an old land owned for more than 3 years is sold - T. N. Pandey - Article published in Business Advisor, dated February 10, 2015 http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
This book provides clause-by-clause analysis of the Finance Bill, 2021. All complex provisions have been explained with illustrations which helps the readers to comprehend the new provisions, in a simplified manner. This book covers analysis on the following:
Direct Taxes
Indirect Taxes (Including GST & Customs)
Corporate Laws
The Present Publication is the Latest Edition, authored by Taxmann’s Editorial Team, with the following coverage:
Tax Rates
Profits and Gains from Business or Profession
Capital Gains
Other Sources
Charitable Trusts
Deductions
TDS and Advance Tax
Return of Income
Assessments
Appeals and Dispute Resolution
Miscellaneous
Amendments Proposed under the GST Laws
Amendments Proposed under the Customs laws
Additional Infrastructure and Development Cess
Amendment under the Central Sales Tax Act
Amendments under the Customs Tariff Act
Amendments Proposed under the Corporate Laws
The detailed coverage of the book is as follows:
Tax Rates
Profits and Gains from Business or Profession
Capital Gains
Other Sources
The document provides details about various exemptions available under the Indian Income Tax Act for capital gains. It discusses sections 54, 54B, 54D, 54EC, 54EE, 54F, 54G, 54GA and 54GB which provide exemption from capital gains tax if the amount of capital gains is invested in specified assets within prescribed time limits. Key conditions, timelines and consequences of not meeting the conditions are explained for each section. The document also covers capital gains tax rates and provisions for non-residents.
The document presents an overview of the Companies (Auditor's Report) Order, 2015, which outlines new reporting requirements for company auditors. It discusses the applicability and exceptions of the Order, changes from the previous 2003 Order, and the specific reporting requirements for auditors regarding issues like fixed assets, inventory, loans, internal controls, statutory dues, and more. The Order aims to enhance transparency through more robust auditing and reporting on key financial and compliance matters by company auditors.
This document provides information about an auditor's report, including:
- The duties of an auditor include preparing an audit report for company members, making required disclosures in the report, and giving reasons for qualifications.
- An auditor's report must state whether the financial statements provide a true and fair view of the company's affairs and include comments on various matters like books of account and accounting standards.
- CARO (Companies Auditor's Report Order) places additional reporting requirements on auditors regarding companies' fixed assets, inventories, loans to related parties, internal controls, public deposits, and other financial matters.
Objectives & Agenda :
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar we shall look at various types of transfers which are exempted from capital gains, cost of acquisition in certain specified cases, capital gains on specified assets and finally, capital gains in case of non-residents. Also, the Webinar will touch upon relevant Judicial Precedents.
The document discusses the impact of adopting Indian Accounting Standards (Ind AS) for automobile companies. It covers key areas like revenue recognition, provisions, hedging, securitizations, deferred tax, embedded derivatives, product development costs, and property, plant and equipment. The overview section explains the transition process to Ind AS, including the requirement for an explicit compliance statement, accounting policy choices, and preparation of an opening Ind AS balance sheet. It also discusses exemptions available, such as the use of deemed cost for property valuations and relief from restating cumulative translation differences.
The document discusses capital gains tax in India. Some key points:
- Profits from the sale of a capital asset are taxed as capital gains and deemed as income in the year the asset is transferred.
- A capital asset is broadly defined as property including both movable and immovable assets, tangible and intangible. Certain assets like stock, personal effects, and agricultural land up to certain limits are excluded.
- Capital assets held for over 36 months are considered long-term, while those held for less than 36 months are short-term. Different tax rates apply to long-term versus short-term capital gains.
- Various transactions like distributions on partition of HUF, gifts, transfers
The document compares the proposed Companies (Auditor's Report) Order, 2016 (CARO 2016) with the existing CARO 2015. Some key changes proposed in CARO 2016 include:
- Expanding the applicability to include foreign companies.
- Raising the thresholds for certain exempted companies.
- Requiring auditors to report on whether title deeds of immovable property are held in the company's name.
- Lowering the threshold for reporting overdue loans from Rs. 5 lacs to Rs. 1 lac.
- Clarifying reporting requirements on statutory dues and disputes.
- Specifying the commencement date as the date of publication in the official gazette.
This document outlines the key changes made to the CARO (Companies Auditor's Report Order) reporting requirements in India. It summarizes the evolution from the CARO 2003 to CARO 2015, including changes made to the number of reporting points (from 21 to 12) and the relevant sections of the Companies Act that govern the order. It also provides definitions of key terms like One Person Company, Small Company, and outlines the 12 points that are required to be reported under CARO 2015, such as maintenance of accounts, statutory dues, loans, internal controls, and fraud.
MSB's PPT on Board's report under the Companies Act, 2013Manoj Singh Bisht
The document provides guidance on the requirements for a Board's Report under the Companies Act, 2013. It discusses each item that must be included in the report as per Section 134, such as the number of board meetings held, the company's dividend policy, details of related party transactions, and the director's responsibility statement. The document also provides clarification on certain items, such as what constitutes a "material" related party transaction for disclosure purposes. Overall, the summary provides a high-level overview of the key contents and statutory requirements of a Board's Report under the Companies Act, 2013 in India.
As per the requirements of said Regulation we have devised our Articles in following part:
1. Checklist for stock exchanges submission;
2. Checklist for shareholders communication
3. Penalty for non-compliance of LODR
4. SEBI FAQs for LODR
5. Board Meeting Tasks
6. Board shall ensure
Which would help you to comply with the requirement of said new regultion for the compliances due after the quarter ended on 31st December, 2015.
ASSESMENT OF THE IMPACT OF IND AS on TelcosHARIT MANKAD
The document discusses the impact of adopting Indian Accounting Standards (Ind AS) for telecom companies in India. Some of the key areas that will be impacted for telecom companies include:
1) Accounting for revenue, spectrum licenses, indefeasible rights of use, property and equipment.
2) Accounting for deferred tax assets and liabilities.
3) Adoption of Ind AS 101 provides exemptions from retrospective application, including the use of fair value as deemed cost for property, plant and equipment.
4) Preparation of an opening Ind AS balance sheet as of the transition date and provision of comparative information will be required.
SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 – HIGH...FCS BHAVIK GALA
This article provides highlights and analysis of the recently notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued by SEBI.
This is 2nd part of IND AS 101 PPT.
I already shared Part 1 few days ago.
In Part 1 full map of IND 101 was there while in Part 2 the portion of Exemptions & Prohibitions on retrospective applications of some aspects of IND Ass has been summarised.
This is most useful for the quick view of practical applicability of IND AS 101.
Thanks!!
Chitranshu Rahul Srivastava
CA, IFRS
The document provides an assessment of the impact of adopting Indian Accounting Standards (Ind AS/IFRS) on the e-commerce sector in India.
1. Key areas that will be impacted for e-commerce companies under Ind AS include accounting for revenue, private equity funding, intangible assets, property/equipment, deferred taxes, and financial instruments.
2. E-commerce businesses operate under two main models - the marketplace model and the inventory-based (B2C) model. Accounting differs between these models.
3. Ind AS 101 provides exemptions and exceptions from full retrospective application that e-commerce companies can utilize, such as using carrying values for assets from previous GAAP and not
1. The document discusses various aspects related to capital gains tax in India including understatement of consideration, reference to valuation officers, transfers between partners and firms, family arrangements, computation of capital gains, and short term versus long term capital assets.
2. It explains the powers of assessing officers to refer cases to valuation officers if the stated consideration is lower than fair market value and the consequences if the valuation officer arrives at a higher value.
3. The treatment of various transfers like between partners and firms, conversion of assets, insurance claims, and retirement of partners is explained citing relevant case laws and tax law sections.
The document summarizes the key changes introduced in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which came into effect in December 2015. Some of the major changes include more stringent corporate governance requirements for listed companies, mandatory registration of share transfer agents with SEBI, enhanced disclosure obligations for events and financial results, restrictions on reclassification of promoters, and new provisions regarding dividend payments, preservation of documents, and responsibilities of stock exchanges. The regulations aim to consolidate various listing requirements for different types of securities into a single document to improve transparency and protect investor interests.
The document discusses changes to the CARO reporting framework under the Companies Act 2013. Key changes include additional reporting requirements on the disposal of substantial fixed assets, loans taken by the company, transactions with directors, internal audits, compliance with special statutes, and details of funds raised and end use of money. New reporting requirements were also added regarding the transfer of amounts to the Investor Education and Protection Fund and adequate internal controls for the sale of services. The auditor must now verify records of fixed assets, physical verification processes, loans and advances, internal controls, statutory compliance, and defaults among other issues.
How capital gain is to be computed when superstructure (building) less than 3...D Murali ☆
How capital gain is to be computed when superstructure (building) less than 3 years old and constructed on an old land owned for more than 3 years is sold - T. N. Pandey - Article published in Business Advisor, dated February 10, 2015 http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
This book provides clause-by-clause analysis of the Finance Bill, 2021. All complex provisions have been explained with illustrations which helps the readers to comprehend the new provisions, in a simplified manner. This book covers analysis on the following:
Direct Taxes
Indirect Taxes (Including GST & Customs)
Corporate Laws
The Present Publication is the Latest Edition, authored by Taxmann’s Editorial Team, with the following coverage:
Tax Rates
Profits and Gains from Business or Profession
Capital Gains
Other Sources
Charitable Trusts
Deductions
TDS and Advance Tax
Return of Income
Assessments
Appeals and Dispute Resolution
Miscellaneous
Amendments Proposed under the GST Laws
Amendments Proposed under the Customs laws
Additional Infrastructure and Development Cess
Amendment under the Central Sales Tax Act
Amendments under the Customs Tariff Act
Amendments Proposed under the Corporate Laws
The detailed coverage of the book is as follows:
Tax Rates
Profits and Gains from Business or Profession
Capital Gains
Other Sources
Taxmann's Guide to SARFAESI Act 2002 & Recovery of Debts and Bankruptcy Act 1993Taxmann
This document provides an overview of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It discusses the background and objectives of the Act, key features such as enforcement of security, securitization, and asset reconstruction. It also examines related topics such as the constitutional validity of the Act, applicability to different entities, and interactions with other laws like the Recovery of Debts and Bankruptcy Act, 1993 and Insolvency and Bankruptcy Code, 2016. The document outlines the procedures for enforcement of security, sale of secured assets, appeals and penalties under the SARFAESI Act.
The document summarizes recent updates to corporate and LLP laws in India in response to COVID-19. It outlines two new schemes - the Companies Fresh Start Scheme, 2020 which gives defaulting companies a chance to file overdue documents by September 2020 with normal fees, and the LLP Settlement Scheme, 2020 which allows defaulting LLPs to file certain overdue documents by September 2020 with reduced fees and immunity from prosecution. It also lists relaxations provided by SEBI and stock exchanges to reduce compliance burdens during the pandemic.
The document discusses taxation issues related to real estate developers and redevelopment projects.
1. It outlines the different stages of real estate development projects and discusses when income should be recognized for tax purposes - whether using the project completion method or percentage completion method.
2. It also discusses whether income from redevelopment projects should be taxed as business income or capital gains for the landowner participating in the project.
3. The document provides an overview of key sections of the Income Tax Act relating to taxation of real estate developers, capital gains, revenue recognition, and the powers of tax authorities to refer cases to valuation officers.
Note of IBBI registered Valuers for shares u/s 247 of Companies Act 2013ANAND GAWADE
This document discusses the role and requirements of IBBI Registered Valuers under the Companies Act 2013 in India. Key points:
- The Companies Act 2013 requires valuations in certain situations to be conducted by individuals registered with IBBI as valuers, such as for issues of further shares, non-cash transactions with directors, schemes of arrangement like mergers/demergers, voluntary winding up of companies.
- It outlines the relevant sections of the Act that specify valuation requirements and the scenarios where a valuation report is mandated.
- Registered valuers must make impartial, true and fair valuations as per prescribed rules and standards and avoid conflicts of interest. Non-compliance can attract penalties and liability.
The document provides guidance on preparing, filing, and certifying the Annual Return for companies in India. It defines key terms and explains that the Annual Return contains important company information like registered office details, shareholding patterns, board and committee meetings, and remuneration. It must be filed within 60 days of the AGM and certified by a Company Secretary for listed or large companies. The Annual Return gives stakeholders a snapshot of the company's status and is important for transparency.
This document discusses taxability of real estate transactions under the Income Tax Act of 1961. It covers topics such as understatement of consideration, reference to the valuation officer, consequences of higher valuation, sections 50C and 55A regarding use of stamp duty valuation and fair market value. Key points include that the assessing officer can refer the case to the valuation officer if the claimed value is less than fair market value, section 50C deems stamp duty value as consideration, and consequences of higher valuation by the valuation officer on the seller and buyer.
The document discusses various taxability issues related to real estate transactions in India. Some key points:
1) The Income Tax Act allows the Assessing Officer to refer cases of understated consideration to the Valuation Officer to determine the fair market value of the capital asset for capital gains purposes.
2) For sellers of property, Section 50C deems the stamp duty valuation to be the full value of consideration if it is higher than the stated value.
3) For buyers, Section 142A allows reference to the Valuation Officer to estimate the value of investments if the source of funds is not adequately explained under Sections 69, 69A or 69B.
4) Agricultural land may be exempt from
This document provides an overview of capital gains tax provisions for residents and non-residents in India. It discusses key definitions related to capital gains, the computation of capital gains, and options for reinvesting capital gains to reduce tax liability, such as purchasing a new residential property. It also covers issues specific to non-residents such as tax deducted at source and applicability of the Foreign Exchange Management Act. The document analyzes relevant sections of the Indian Income Tax Act and notes proposed changes in the upcoming Direct Taxes Code.
This document discusses equity share valuation under different statutes. It provides an overview of the purpose of equity share valuation and who can perform valuations. It then discusses valuation requirements and triggers under the key statutes - the Companies Act 2013, Income Tax Act 1961, and Foreign Exchange Management Act 1999. Finally, it covers common methods of valuation including discounted cash flow, capitalization of earnings, and asset-based approaches.
- Any capital gains arising from the transfer of a capital asset during an assessment year is chargeable to capital gains tax in the immediately following assessment year, unless exempt.
- For capital gains tax to apply, there must be a capital asset, it must be transferred by the assessee, the transfer must occur during the relevant year, and any profit or gains must arise from the transfer.
- Certain assets are excluded from the definition of capital assets, including certain personal assets and government securities. Capital assets are classified as short-term or long-term based on the period of holding, with different tax rates and exemptions applying.
Capital gains arising from the transfer of a capital asset during the previous year are chargeable to tax. For an asset to be considered a capital asset, there must be a transfer by the assessee, the asset must have been held for the required period of time (short-term or long-term), and any profit or gains must have arisen from the transfer. Certain assets and transfers are exempt from capital gains tax. The computation of capital gains involves determining the full value of consideration, cost of acquisition, and cost of improvements to arrive at the capital gains amount.
This document provides a summary of key changes to India's Income Tax laws in the Budget 2015-16. Some key points include:
- Deductions for medical insurance premiums have been increased for individuals and senior citizens. A new deduction of up to Rs. 30,000 has been introduced for medical expenditure on very senior citizens (over 80 years).
- The benefit of a deduction for additional wages has been extended to all companies rather than just corporates. The threshold has also been lowered to 50 employees.
- New rules have been introduced to facilitate taxation of Alternative Investment Funds and Real Estate Investment Trusts.
- The threshold for applicability of domestic transfer pricing has been raised to transactions exceeding Rs. 200
This document provides an overview of capital gains taxation in India. It defines key terms like capital asset, short-term capital asset, long-term capital asset, and transfer. It explains the computation of short-term and long-term capital gains, and lists various exemptions available. It also discusses the year of chargeability for capital gains and exceptions like compulsory acquisition. Certain transactions like transfer through gifts or partition of HUF are not regarded as transfers that are taxed. The document concludes with providing the cost inflation index values for different financial years.
- The document discusses the basics of capital gains taxation in India under sections 45-55 of the Income Tax Act.
- Capital gains are the profits arising from the transfer of a capital asset. The key elements are a capital asset, its transfer, and the computation of the capital gain or loss.
- Capital assets are divided into short-term and long-term based on the period of holding, which determines whether the gain is taxed as short-term or long-term capital gain.
The document summarizes key changes to foreign exchange laws in India related to overseas direct investments and foreign direct investment. Some of the key changes include:
- Restoring limits on overseas direct investments by Indian parties under the automatic route to pre-August 2013 levels, but requiring RBI approval for any single financial commitment exceeding $1 billion.
- Allowing issue of partly paid shares and warrants by Indian companies to foreign investors, subject to pricing guidelines where 25% of consideration is received upfront and the balance within 12-18 months.
- Revising pricing guidelines for issue/transfer of shares under foreign direct investment to provide greater flexibility, requiring listed companies to follow SEBI guidelines and allowing unlisted companies to issue
Taxmann's Deduction of Tax at Source with Advance Tax Taxmann
This book provides a complete and thorough analysis of the Income-tax provisions relating to deduction or collection of tax at source, advance tax, and refunds.
This book is the 33rd Edition & updated till 6th July 2020. It incorporates all the amendments listed below:
• Finance Act, 2020
• The Taxation Laws (Amendment) Act, 2019
• The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020
Key features of the book are as follows:
• Information on all the interconnected provisions are provided
at a single place
• Detailed analysis of TDS and TCS provisions
• Complete analysis of the rules prescribed on TDS and TCS
provisions
• Illustrations for easy understanding of various complex
provisions
• Guidance on the controversial issues with supporting Case
Laws
• Circulars and notifications are linked with the relevant
provisions
• Forms required for meeting compliance requirements
• The list of content to quickly find the required information
Section 45 of the Income Tax Act determines the chargeability of capital gains. It states that capital gains will be charged to tax in the previous year in which the transfer took place. The section outlines various events that constitute a transfer, such as sale, exchange, relinquishment of an asset, compulsory acquisition, and conversion of a capital asset into stock-in-trade. It also specifies the consideration amount and year of chargeability for different types of transfers, including those between an individual and firm/AOP/BOI, by a firm/AOP/BOI to its partners/members, and those involving compulsory acquisition or determination of consideration by the government. The section seeks to tax capital gains arising from the transfer
Similar to Taxmann's Taxation of Capital Gains (20)
GST Made Easy provides an Updated, Comprehensive & Simplified Analysis of each provision of the GST Law. The objective behind this book is that the understanding of GST should be as easy as ABC. This book provides answers to all your practical queries on GST.
The Present Publication is the 10th Edition, authored by CA (Dr.) Arpit Haldia & updated till 15th June 2021, with the following noteworthy features:
• [Focus on Analysis of Substantive Provisions of the GST Law] such as supply, time of supply, place of supply, value of supply, input tax credit, etc.
• [Guidance on all Procedural Provisions] relating to registration, composition scheme, returns, liability to pay tax, etc.
• [Coverage of Provisions of the GST Law] such as assessment, demand & recovery, refunds, e-way bill, job work, etc.
The contents of the book are as follows:
• Introduction
• An Overview of GST
• Person Liable to Pay Tax in GST
• Registration in GST
• What is Supply
• Time of Supply of Goods
• Time of Supply of Services
• Value of Supply
• Place of Supply
• Determination of Supply in the Course of Inter-State Trade or Commerce or Intra-State Supplies
• Job Work
• Invoice, Credit and Debit Notes
• Input Tax Credit
• Payment of Taxes
• Brief about Persons requiring Mandatory Registration
• Composition Levy – For Supplier of Goods and for Persons Engaged in Making Supplies Referred to in Clause (b) of Paragraph 6 of Schedule II
• Returns
• Assessment
• Refund
• Accounts and Records
• E-Way Bill
• Advance Ruling
• Composition Scheme for Services or Mixed Suppliers
• Demand and Recovery
• Penalty
• Rule 86B – Payment of 1% of Output Liability in Cash
Taxmann's LLP Manual is a compendium Amended, Updated & Annotated text of the Limited Liability Partnership Act, 2008 (as amended by the Limited Liability Partnership (Amendment) Act, 2021) along with Rules, Circulars, and Notifications.
This book is divided into four divisions:
• Limited Liability Partnership Act, 2008
• Limited Liability Rules
• Circulars & Notifications
• Foreign Direct Investment in Limited Liability Partnership
The Present Publication is the 8th Edition & amended up to 13th August 2021, authored by Taxmann's Editorial Board, with the following noteworthy features:
• [List of Amendments, at a glance] made by the Limited Liability Partnership (Amendment) Act, 2021
• [Short Commentary] on the following:
◦ Limited Liability Partnership (Amendment) Act, 2021
◦ Limited Liability Partnership Act, 2008
• [Integrated LLP Rules, Circulars & Notifications, FDI Policy, FEMA Regulations]
◦ Limited Liability Partnership Rules, 2009 as amended up to date
◦ Limited Liability Partnership (Winding up and Dissolution) Rules, 2012
◦ Text of LLP Circulars & Notifications
◦ FDI Policy related to LLPs
◦ FEMA Regulations & Schedules related to LLPs
• [Taxmann's series of Bestseller Books] on LLP Laws
• [Follows the six-sigma approach] to achieve the benchmark of 'zero error'
GST Investigations Demands Appeals & Prosecution aims to cover the past & emerging jurisprudence on the subject matter along with a lucid commentary on the statutory provisions under the GST Law relating to the following:
• GST Inspection
• GST Search
• GST Seizure
• GST Detention
• GST Audit
• GST Confiscation
• GST Penalty
• GST Show Cause Notice
• GST Adjudication
• GST Appeals
• GST Revision
• GST Prosecution
• GST Compounding
The objective of this book is to sensitize both taxpayers and tax officers of their rights and obligations when:
• Investigations are undertaken;
• Records and documents are seized;
• Officials from companies are summoned, and
• Statements are recorded.
This book will be helpful for taxpayers, departmental officers, members of the bar & bench, professionals and the judiciary to appreciate the intricate points and issues arising out of implementation of the relevant provisions conferring wide powers on the officers.
The Present Publication is the Latest Edition, authored by Dr. Gokul Kishore & R. Subhashree & amended up to July 2021, with the following noteworthy features:
• [Commentary/Practical Guide] This book is intended to serve as a commentary and also a practical guide to all stakeholders on the provisions and issues emerging from various orders passed by High Courts on search, summons, arrest, bail, provisional attachment, demands, penalty and confiscation
• [Analysis of the Statutory Provisions featuring Landmark Cases & Recent Orders] GST is in force for only four years. Still, instances of the use of powers of search and seizure have been increasingly visible. This book analyses the provisions along with both the landmark cases on this subject as well as the recent orders under GST law.
• [Analysis includes the Previous & Current Regime of Indirect-taxes] While arrest and prosecution powers have been in the statute book under the pre-GST tax laws, the frequency of invocation of such powers in the GST regime is high. Various orders on bail, conditions for bail and validity of arrest passed by High Courts have been discussed to comprehend the scope, limitations and interpretation of the provisions
• [Threadbare Analysis with Established Jurisprudence & Principles Evolved over the Years] Proceedings for recovery of tax commences with demand notice or show cause notice followed by adjudication order, and the dispute is carried in an appeal if either party is aggrieved. The provisions under GST law on demands, adjudication, appeals, revision and recovery action have been subjected to threadbare analysis with the help of established jurisprudence and principles evolved over the years
Taxmann's GST Law & Practice is a unique/concise book on the GST Laws (i.e., Statutory Portion & Case Laws). Coverage of the book is as follows:
• Central Goods and Services Tax Act 2017 (CGST)
• Integrated Goods and Services Tax Act 2017 (SGST)
• Goods and Services Tax (Compensation to States) Act 2017
• Classification of Goods & Services
What sets it apart is the 'unique way of presenting' the compendium of 'updated, amended & annotated' text of the CGST & SGST Acts along with relevant Rules, Notifications, Forms, Circulars, Clarifications, and Case Laws. In other words, read the Section & get the following:
• Text of the relevant Rules & Notifications
• The gist of the relevant Circulars
• Date of enforcement of provisions
• Allied Laws referred to in the provision
• Gist of relevant Case Laws with an easy-to-understand summary
This book also includes Case Laws on the classification of goods & services under the GST regime in a separate division.
The Present Publication is the 2nd Edition, amended up to July 2021, authored by CA (Dr.) Arpit Haldia & CA Mohd. Salim, with the following noteworthy features:
• [Taxmann's series of Bestseller Books] on GST Laws
• [Follows the six-sigma approach] to achieve the benchmark of 'zero error.'
The detailed contents of the book are as follows:
• Central Goods & Services Tax Act 2017
◦ Arrangement of Sections
◦ Arrangement of Rules
◦ Text of the Central Goods & Services Tax Act, 2017
◦ Removal of Difficulties Order
◦ Text of Provisions of Allied Acts referred to in Central Goods & Services Tax Act, 2017
◦ Subject Index
• Integrated Goods & Services Tax Act 2017
◦ Arrangement of Sections
◦ Arrangement of Rules
◦ Text of the Integrated Goods & Services Tax Act, 2017
Subject Index
• Goods and Services Tax (Compensation to States) Act 2017
◦ Arrangement of Sections
◦ Text of the Goods and Services Tax (Compensation to States) Act, 2017
◦ Subject Index
• Classification of Goods & Services
◦ Classification of Goods
◦ Classifications of Services
This standard provides guidance on accounting for property, plant and equipment (PPE), which typically constitute a significant portion of total assets. It discusses capitalization of expenditures on PPE, depreciation, retirement and disposal of PPE. These have a material impact on balance sheet and profit and loss statement. The standard scopes in tangible items held for use in production/supply of goods/services, rental to others or for administrative purposes, which are expected to be used for more than one period.
GST Exports-Imports & Deemed Exports is a harmonious blend of the following laws:
• GST
• Customs
• Foreign Trade Policy
• Allied Laws
This book aims to consolidate & explain different provisions of the law and subsequent procedural changes such as Notifications, Circulars, Instructions and Trade Notices issued by CBIC and DGFT, along with relevant Advance Rulings with regards to Imports, Exports, Deemed Exports under different laws.
This book is intended to help the trade and industry dealing with exports, imports and deemed exports for compliance with the legal requirements and avail the benefits under various provisions of the Foreign Trade Policy, Customs and GST laws with better understanding and appreciation of the intricacies.
The Present Publication is the 2nd Edition, authored by Kaza Subrahmanyam & T.N.C. Rajagopalan, with the following coverage:
• [Conceptual Understanding of provisions of Imports and Exports] of Goods & Services
• [Meaning of Zero Rated Supply along with Refunds] for Physical Exports and Deemed Exports under GST
• [Treatment of supplies by and to EOU/SEZ unit or SEZ Developer/FTWZ] along with Special Exemptions/Concessions and procedural requirements
• [Foreign Trade Policy] under GST
Guide to Customs Valuation is a complete and comprehensive commentary on laws relating to valuation under Customs laws. It is a brief, concise and handy reference book, which provides the updated and simplified analysis of provisions to determine valuation under the Customs laws.
This book will be helpful for Customs Consultants, Advocates, Corporate Managers & Departmental Officers.
This book is divided into two parts:
• Valuation of Imported Goods
• Valuation of Export Goods
The Present Publication is the Latest Edition, authored by H.K. Maingi, amended up to July 2021, with the following noteworthy features:
• [Conceptual Understanding of Valuation] Conceptual understanding of provisions of Valuation under Section 14 of Customs Act and Customs Valuation (Determination of Value of Export Goods) Rules, 2007
• [Valuation] Valuation of Imported Goods & Exported Goods, Valuation in case of High Sea Sales & related persons, Valuation of capital goods on debonding, etc.
• [Various Additions in Transaction Value] Various additions in Transaction Value such as Brokerage, Service Charge, Transportation, etc.
• [Other Concepts] Concepts of related persons, under-invoicing and over-invoicing, Special Valuation Branch, etc.
This edition covers everything you need to understand about the provisions of Valuation under Customs in a subtle and simplified language.
The detailed coverage of the book is as follows:
• Introduction
• Valuation of Imported Goods
◦ Transaction Value
◦ Transaction Value to be Accepted in the Absence of Condition and Restriction under Rule 3(2)
◦ Contract Prices and Transaction Value
◦ High Sea Sales and Transaction Value
◦ Related Persons
◦ Transaction Value of Identical or Similar Goods and Contemporaneous Imports
◦ Deductive Value
◦ Computed Value
◦ Residual Method
◦ Reliance on Foreign Journals indicating International Prices for Determining Assessable Value
◦ Addition to Transaction Value Royalty, Licence and Technical Know-How Fees
◦ Other Addition to Transaction Value
◦ Declaration by the Importer
◦ Rejection of Declared Value
◦ Investigation by Special Valuation Branch
• Valuation of Export Goods
◦ Export Valuation
◦ Under-Invoicing and Over-Invoicing of Exports
◦ Customs Valuation (Determination of Value of Export Goods) Rules, 2007
◦ Inclusion/Exclusion Duty Element from Cum Duty Price
◦ Valuation of Goods Sold in DTA from EOU and Debonding of Capital Goods from EOU
Taxmann's MCQs and Integrated Case Studies on Corporate & Economic LawsTaxmann
MCQs & Integrated Case Studies on Corporate & Economic Laws are prepared exclusively for the Final Level of Chartered Accountancy Examination requirement. It covers the entire revised, new syllabus as per ICAI.
The Present Publication is the 6th Edition & Updated till 30th April 2021 for CA-Final | New Syllabus, with the following noteworthy features:
• Strictly as per the New Syllabus of ICAI
• [Knowledge Based & Application Based MCQs] as per the pattern applicable for the exams
• Includes the following types of MCQs in a Separate Section in Each Chapter:
◦ RTPs & MTPs
◦ Past Exam Questions
• [Most Updated & Amended] This book is updated & amended as per the following:
◦ Companies (Amendment) Act, 2020
◦ Companies (Appointment and Qualifications of Directors) 5th Amendment Rules, 2020
◦ Schedule V of the Companies Act, 2013
◦ Master Directions – External Commercial Borrowings (Updated as of 12th April 2021)
◦ Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021
◦ Foreign Contribution (Regulation) Amendment Act, 2020
◦ Arbitration and Conciliation (Amendment) Act, 2021
◦ Insolvency and Bankruptcy (Amendment) Ordinance, 2021
Also Available:
• [7th Edition] of Taxmann’s Corporate & Economic Laws (New Syllabus)
• [7th Edition] of Taxmann’s CRACKER cum Exam Guide on Corporate & Economic Laws (New Syllabus)
• Taxmann’s Combo for Textbook + Cracker + MCQs & Integrated Case Studies + Class Notes
Contents of this book are as follows:
• Appointment and Qualifications of Directors
• Meeting of the Board and its Powers
• Appointment and Remuneration of Managerial Personnel
• Inspection, Inquiry and Investigation
• Compromises, Arrangements and Amalgamations
• Prevention of Oppression & Mismanagement
• Winding Up
• Companies Incorporated Outside India
• Miscellaneous Provisions
• Adjudication and Special Courts
• NCLT and NLCAT
• Corporate Secretarial Practice
• Securities Contracts (Regulation) Act, 1956 and SCR Rules, 1957 | Deleted from Syllabus
• Securities and Exchange Board of India Act, 1992 & SEBI (LODR) Regulations, 2015
• Foreign Exchange Management Act, 1999
• Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFESI Act, 2002) | Deleted from Syllabus
• Prevention of Money Laundering Act, 2002
• Foreign Contribution (Regulation) Act, 2010
• Arbitration and Conciliation Act, 1996
• Insolvency and Bankruptcy Code, 2016
• Integrated Case Studies
Taxmann’s CRACKER for Corporate & Economic Laws is prepared exclusively for the Final Level of Chartered Accountancy Examination requirement. It covers the entire revised, new syllabus as per ICAI.
The Present Publication is the 7th Edition & Updated till 30th April 2021 for CA-Final | New Syllabus, authored by Pankaj Garg, with the following noteworthy features:
• Strictly as per the New Syllabus of ICAI
• [600+ Questions and Case Studies] with complete answers
• Coverage of this book includes:
• All Past Exam Questions
▪ CA Final July 2021 (New Syllabus) – Suggested Answers
◦ Questions from RTPs and MTPs of ICAI
• [Chapter-wise] marks distribution for Past Exams
• [Most Updated & Amended] This book is updated & amended as per the following:
◦ Companies (Amendment) Act, 2020
◦ Companies (Appointment and Qualifications of Directors) fifth Amendment Rules, 2020
◦ Schedule V of the Companies Act, 2013
◦ Master Directions – External Commercial Borrowings (Updated as of 12th April 2021)
◦ Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021
◦ Foreign Contribution (Regulation) Amendment Act, 2020
◦ Arbitration and Conciliation (Amendment) Act, 2021
◦ Insolvency and Bankruptcy (Amendment) Ordinance, 2021
Also Available:
• [7th Edition] of Taxmann’s Corporate & Economic Laws (New Syllabus)
• [6th Edition] of Taxmann’s MCQs & Integrated Case Studies on Corporate & Economic Laws (New Syllabus)
• Taxmann’s Combo for Textbook + Cracker + MCQs & Integrated Case Studies
Contents of this book are as follows:
• Appointment and Qualifications of Directors
• Meeting of the Board and its Powers
• Appointment and Remuneration of Managerial Personnel
• Inspection, Inquiry and Investigation
• Compromises, Arrangements and Amalgamations
• Prevention of Oppression & Mismanagement
• Winding Up
• Companies Incorporated Outside India
• Miscellaneous Provisions
• Adjudication and Special Courts
• National Company Law Tribunal and Appellate Tribunal
• Corporate Secretarial Practice – Drafting of Notices, Resolutions, Minutes & Reports
• Securities Contracts (Regulation) Act, 1956 and SCR Rules, 1957 (Deleted from syllabus)
• Securities and Exchange Board of India Act, 1992 & SEBI (LODR) Regulations, 2015
• Foreign Exchange Management Act, 1999
• Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFESI Act, 2002)
• Prevention of Money Laundering Act, 2002
• Foreign Contribution (Regulation) Act, 2010
• Arbitration and Conciliation Act, 1996
• Insolvency and Bankruptcy Code, 2016
FEMA & FDI Ready Reckoner provides complete and accurate information about all provisions of the Foreign Exchange Management Act, 1999 (FEMA). It also includes guidance on all practical issues faced by companies and FEMA professionals.
Key features of this book are as follows:
• Topic-wise commentary on FEMA
• Analysis of all provisions of FEMA with relevant Rules, Judicial Pronouncements, Circulars, Notifications and Master Directions issued by Reserve Bank of India
• Law Relating to the following
◦ Prevention of Money Laundering Act
◦ Foreign Contribution (Regulation) Act
◦ COFEPOSA
The Present Publication is the 15th Edition, and it is amended up to 30th June 2021. The coverage of this book is as follows:
• FEMA – Overview
• Authorised Person under FEMA
• Account in India by Person Resident out of India
• Accounts of Indian Residents in Foreign Currency
• Receipt and Payment in Foreign Exchange
• Realisation, Repatriation and Surrender of Foreign Exchange
• Money Changing Activities
• Money Transfer Service Scheme (MTSS)
• Possession and Retention of Foreign Currency
• Export and Import of Currency or Currency Notes
• Remittances on Current Account
• Liberalised Remittance Scheme (LRS)
• Export of Goods and Services
• Import of Goods and Services
• Project Exports and Service Exports
• Foreign Exchange Rates
• Overview of Capital Account Transactions
• Foreign Investment in India
• FDI in Indian Company
• Section Wise FDI Policy at a Glance
• FDI – Downstream Investment, i.e. Indirect Investment
• FDI through Rights, Bonus, Sweat Equity or Merger/Amalgamation
• FDI – Transfer of Securities
• FDI in LLP
• FDI in GDR/ADR
• Investment by NRI or OCI
• FDI in Startup Company
• Investment by Foreign Portfolio Investors
• FDI in Investment Vehicle
• FDI by FVCI
• FDI – Investment in Securities by Funds, Foreign Central Bank, etc.
• Investment by Indian Entity in JV/WOS Abroad
• Guarantees
• Insurance
• Borrowing and Lending in Foreign Currency
• Borrowing and Lending in Indian Rupees
• Foreign Investment in Debt Instruments
• External Commerical Borrowings
• Trade Credit (TC) and Structured Obligations
• Acquisitions and Transfer of Immovable Property in India
• Acquisition and Transfer of Immovable Property out of India
• Remittance of Assets
• Branch/LO/Project Office in India by Foreign Entities
• Indian Depository Receipts
• Risk Management and Inter-Bank Dealings
• VOSTRO Account of Non-Resident Exchange Houses
• Industrial Policy of Government of India
• Enforcement of FEMA
• Penalties under FEMA
• Appeals under FEMA
• Compounding of Contraventions under FEMA
• Prevention of Money Laundering Act
• Foreign Contribution (Regulation) Act (FCRA)
• COFEPOSA, 1974
This book provides a para-wise commentary on Companies (Auditor’s Report) Order. It is a complete guide on the applicability and the matters that need to be reported by an Auditor on CARO.
This book is divided into three divisions:
• CARO Reporting under CARO, 2020 (Applicable from Financial Year 2021-22)
• CARO Report on Consolidated Financial Statements under CARO, 2020
• CARO Reporting under CARO, 2016 (Applicable for Financial Year 2021-22)
This book will be helpful for Auditors
The Present Publication is the 8th Edition, amended up to 30th June 2021, authored by CA Srinivasan Anand G., with the following noteworthy features:
• [FAQs & Case Studies]
◦ CARO 2016
◦ CARO 2020
• [Amended Schedule II] Related disclosure requirements
• [Clause-wise Ready Reckoner] on CARO 2020
• Review of earlier versions of CARO to do a quick comparison(s)
• [In a Nushell] CARO 2020
• Relevant Provisions of Companies Act, 2013
Taxmann's Indian Accounting Standards (Ind AS)Taxmann
Indian Accounting Standards (Ind AS) contains the updated Indian Accounting Standards issued under the Companies (Indian Accounting Standard) Rules, 2021.
It provides a complete understanding of the definitions, entities liable to apply Ind AS, and exemptions.
The Present Publication is the 2nd Edition, authored by Taxmann’s Editorial Board, updated till 30th June 2021, with the following noteworthy features:
• [Text of Indian Accounting Standard (Ind AS)] notified under Companies (Indian Accounting Standard) Rules, 2021;
• [Guide for Definitions] in Indian Accounting Standards
• [Guide on Applicability] of Indian Accounting Standards
• [Guide on Obligations to Comply with] in Indian Accounting Standards
• [Guide on Exemptions/Relaxations] in Indian Accounting Standards
The contents of the book are as follows:
• Arrangement of Rules
◦ Short Title and Commencement
◦ Definitions
◦ Applicability of Accounting Standards
◦ Obligation to Comply with Indian Accounting Standards (Ind AS)
◦ Exemptions
• General Instructions
• Indian Accounting Standards (Ind AS)
Taxmann's Indian Competition Law is a section-wise commentary on Competition Law. What sets this book apart is the unique combination of the study of both substantive and procedural elements of Competition Law in India.
The objective of this book is three-fold:
• Focusing on Indian Competition Law, elucidating the Indian jurisprudence and then comparing it with positions taken by European Union (EU) and the United States
• This book does not get restricted to the major provisions/broader issues of competition law but also highlights economic, technical and administrative concepts/issues that are relevant in the practical application and interpretation of competition law
• This book does not become a technical treatise but a document that a wider audience can read and understand, including lawyers, judges, academicians, lawmakers, market regulators, & entrepreneurs.
The Present Publication is the Latest Edition, authored by Adv. Gautam Shahi & Dr. Sudhanshu Kumar, amended up to 30th May 2021, with the following noteworthy features:
• [Detailed Study on Fundamental Issues] including:
o Anti-Competitive Agreements
o Abuse of Dominant Position
o Combinations (Acquisitions and Mergers)
• [Evolution of Competition Jurisprudence] in India
• [Comparitive Assessment] of major issues in Indian competition law with vis-à-vis EU, UK, and the USA
• [Exhaustive Analysis] on Rules, Regulations, Guidance issued by CCI & Case Laws decided by the CCI, COMPAT (now NCLAT), High Courts, and the Supreme Court
• [Interaction of Competition Act with other Laws] such as:
o Administrative Law
o Intellectual Property Laws
o Telecom Laws
Tax Practice Manual is an exhaustive (2,100+ pages), amended (by the Finance Act, 2021) & practical guide (330+ case studies) for Tax Professionals.
This book will be helpful for the Chartered Accountants, Lawyers/Advocates, Tax Practitioners to assist them in their day-to-day tax works.
This book is divided into two parts:
• Law Relating to Tax Procedures (covering 25+ topics)
• Case Studies (covering 35+ topics)
The Present Publication is the 7th Edition, authored by Gabhawala & Gabhawala, as amended by the Finance Act 2021, with the following noteworthy features:
• Law Relating to Tax Procedures
◦ [Lucid Explanation, in a Practical Manner, with Checklists & necessary Tips] for the law relating to Tax Procedure
◦ [Exhaustive Coverage of Case Laws]
◦ [Fine Prints & Unwritten Lines] are explained in a lucid manner
• Tax Practice
◦ [Elaborated & Threadbare Analysis] of every aspect of Tax Practice
• Case Studies
◦ [330+ Case Studies] to deal with real-life animated situations/problems faced by tax practitioners
• Draft Replies
◦ For the Notices sent by the Department
◦ Petitions to the Department
• Drafting & Conveyancing
◦ [Complete Guide to Drafting of Deeds & Documents] covering
◦ Affidavits
◦ Wills
◦ Special Business Arrangements
◦ Family Arrangements
◦ Power of Attorney
◦ Lease, Rent & Leave and Licenses
◦ Indemnity and Guarantee
◦ Charitable Trust Deeds, etc.
The contents of this book are as follows:
• Law Relating to Tax Procedures
◦ Tax Practice
◦ Pre-assessment Procedures
◦ Assessment
◦ Appeals
◦ Interest, Fees, Penalty and Prosecution
◦ Refunds
◦ Settlement Commission – ITSC, Interim Board for Settlement
◦ Summons, Survey, Search
◦ TDS and TCS
◦ Recovery of Tax
◦ Special Procedures
◦ Approvals
◦ STT, DDT, Tax on Liquidation, Reduction and Buy Back, MAT, AMT and WT
RTI, Ombudsman
◦ Drafting of Deeds
◦ Agreement, MoU
◦ Gifts, Wills, Family Arrangements
◦ Power of Attorney, etc.
◦ Lease, Rent, License, etc.
◦ Sale/Transfer of Properties
◦ Tax Audit
◦ Income Computation & Disclosure Standards
◦ Real Estate (Regulation and Development) Act, 2016 (RERA)
◦ E-Proceedings under the Income Tax Act, 1961
◦ Prohibition of Benami Property Transactions Act, 1988
• Case Studies
◦ Tax Practice
◦ Pre-Assessment Procedures
◦ Assessment – Principles and Issues
◦ Rectification of Mistake
◦ Revision
◦ Appeals to CIT (Appeals)
◦ Appeals to – ITAT – High Court – Supreme Court
◦ Interest Payable by Assessee
◦ Penalties
◦ Prosecution
◦ Refunds
◦ Settlement of Cases
◦ Survey
◦ Search & Seizure
◦ Tax Deduction at Source
◦ Recovery of Tax
◦ Trust, Mutuality, Charity
◦ Firm
◦ LLP – Limited Liability Partnership
◦ Right to Information – RTI
◦ Agreement, MoU
◦ AOP – Association of Persons
◦ HUF – Hindu Undivided Family
◦ Gifts
◦ Wills
◦ Family Arrangements
◦ Power of Attorney
◦ Indemnity and Guarantee
◦ Lease, Rent, Leave and License
◦ Sale/Transfer of Properties
◦ Tax Audit
This document is the contents page and introduction for a book on Competition Law in India published by Taxmann Publications Pvt. Ltd. It provides an overview of the book's organization, outlines the various divisions covering the Competition Act of 2002 and associated rules and regulations, and includes standard copyright and disclaimer information for publications.
Taxmann's CLASS NOTES | Direct Tax Laws and International TaxationTaxmann
Taxmann’s CLASS NOTES for Direct Tax Laws & International Taxation is a one-stop solution to conquer the vast subject of Direct Taxation with ease. The objective behind this book is to minimize the need to consult multiple voluminous books while revising the day before the exam.
This book aims at providing all concepts in a simple language, with proper linking and a smart sequential approach. It also explains the provision of the law without resorting to paraphrasing of sections or legal jargons.
The Present Publication is the 2nd Edition (For New Syllabus) & Updated till 30th April 2021, authored by CA V. Rahul Agarwal, with the following noteworthy features:
• Strictly as per the New Syllabus of ICAI
• [Pictorial Presentation/Charts with Handwritten Fonts] are used in the book for easy understanding of theoretical concepts
• [Multi-Colour Coded Book] which follows the below structure:
◦ Blue – Heading
◦ Black – Main Content
◦ Red – Summarised version of the main content
◦ Green – Amendments applicable for the examination
◦ Yellow Highlights – Key adjustments to be highly cautious of; ‘The Accident-Prone Zones’
◦ Blue Boxes – Significant selected Case Laws provided by ICAI
◦ Green Boxes – Authors personal notes for better understanding and clarity
• [Amendments for November 2021 Examination] are provided at the end of the module
Also Available:
• [65th Edition] of Taxmann’s Direct Taxes Law & Practice with special reference to Tax Planning
• [2nd Edition] of Taxmann’s Direct Tax Laws & International Taxation (2 Vols.)
• [2nd Edition] of Taxmann’s CRACKER cum Compiler – Direct Tax Laws & International Taxation
Taxmann's Problems & Solutions for Direct Tax Laws & International TaxationTaxmann
Taxmann's PROBLEMS & SOLUTIONS for Direct Tax Laws & International Taxation is a compilation of questions & MCQs (prepared using handwritten fonts) from the educational materials, RTPs, MTPs and past examination papers of both old & new syllabus of ICAI (up to 30th April 2021). These are aligned with provisions applicable for Nov. 2021 Exams and are arranged Topic-wise & Chapter-wise with proper reference to the paper as well as attempt for convenience and trend analysis.
The Present Publication is the 2nd Edition (For New Syllabus) & Updated till 30th April 2021, authored by CA V. Rahul Agarwal, with the following noteworthy features:
• [Coverage of All Questions & MCQs] in handwritten fonts
◦ For Old/New Syllabus; issued up to 30th April 2021, from the following:
▹ Educational Material of ICAI
▹ RTPs & MTPs of ICAI
▹ Past Examination Papers of ICAI
◦ The above Questions & MCQs are aligned with applicable provisions for November 2021 examination
◦ Arranged 'Topic-wise' & 'Chapter-wise' with proper reference to paper as well as attempt for convenience and trend analysis
• [Ready Reckoner for the day before the exam] Special adjustments tested by ICAI have been summarised at the start of the book
Also Available:
• [65th Edition] of Taxmann's Direct Taxes Law & Practice with special reference to Tax Planning
• [2nd Edition] of Taxmann's Direct Tax Laws & International Taxation (2 Vols.)
• [2nd Edition] of Taxmann's CRACKER cum Compiler – Direct Tax Laws & International Taxation
The contents of the book are as follows:
• Summary of Special Adjustments
• Part A – Direct Taxation
◦ Basics of Income Tax
◦ Special Tax Regime
◦ Taxation of Agriculture Income
◦ Income from Salary
◦ Income from House Property
◦ Profits and Gains of Business or Profession
◦ Capital Gains
◦ Taxation of Business Re-Organisations
◦ Taxation of Distribution to Owners
◦ Income from Other Sources
◦ Taxation of Dividends & Income from Units
◦ Comprehensive Questions
◦ Assessment of Firms & LLP
◦ Assessment of AOP & BOI
◦ Assessment of Non-Profit Organization (NPO) & Exit Tax
◦ Assessment of Business Trust
◦ Assessment of Other Persons
◦ Taxation of Unexplained Income
◦ Clubbing of Income
◦ Set-Off and Carry Forward of Losses
◦ Exemptions & Sec. 10AA Deductions
◦ Chapter VI-A Deduction
◦ Minimum Alternate Tax [Section 115JB] & Alternate Minimum Tax [Section 115JC]
◦ TDS & TCS
◦ Payment of Taxes & Return Filing
◦ Assessment Procedure
◦ Appeals & Revisions
◦ Settlement Commission
◦ Tax Planning, Avoidance & Evasion
◦ Penalties, Offence & Prosecution
◦ Liability in Special Cases
◦ Statement of Financial Transactions (SFT) & Miscellaneous Provisions
• Part B – International Taxation
◦ Transfer Pricing & Related Provisions
◦ Residential Status & Scope of Total Income
◦ Non-Resident Taxation
• Part C – Suggested Answers (Amended as Applicable for A.Y. 2021-22)
Taxmann's 20 REVISED DUE DATES under Income-tax ActTaxmann
In view of the COVID-19 pandemic, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TLA Act, 2020) has extended various due dates of compliances. The due dates so extended by the TLA Act, 2020 have been extended again on multiple occasions by the CBDT. The CBDT has again extended the due dates for certain compliances and has also announced to provide tax exemption for the expenditure incurred by the taxpayers on COVID-19 treatment. Further, the ex-gratia or any compensation received by the family members of any person who succumbed to COVID-19 will be exempt from tax. The impact of new notifications and circulars on various time barring dates and certain compliance of the Income-tax Act are discussed in the below paragraph.
Taxmann's MCQs and Integrated Case Studies on Advanced Auditing and Professio...Taxmann
1. ABC Ltd is a leading pharmaceutical company acquired by XYZ Ltd 5 years ago. XYZ Ltd holds 75% shares of ABC Ltd.
2. The governments of Punjab, Haryana and Rajasthan collectively hold 51.5% shares of XYZ Ltd.
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Taxmann's CRACKER | Advanced Auditing & Professional EthicsTaxmann
Taxmann’s CRACKER for Advanced Auditing & Professional Ethics is prepared exclusively for the requirement of the Final Level of Chartered Accountancy Examination. It covers the entire revised, new syllabus as per ICAI.
The Present Publication is the 8th Edition & Updated till 30th April 2021 for CA-Final | New Syllabus, with the following noteworthy features:
• Strictly as per the New Syllabus of ICAI
• [1,000+ Questions and Case Studies] with complete answers
• [ICAI Examiner Comments] along with Past Exam Questions are included
• Coverage of this book includes:
◦ All Past Exam Questions
▪ CA Final November 2020 (New Syllabus) – Suggested Answers
▪ CA Final January 2021 (New Syllabus) – Suggested Answers
◦ Questions from RTPs and MTPs of ICAI
• [Point wise] answers for easy learning
• [Chapter-wise] marks distribution for Past Exams
• [Most Updated & Amended] This book is updated & amended as per the following:
◦ Companies (Audit and Auditor’s) Amendment Rules, 2021
◦ Companies (Amendment) Act 2020
◦ Companies (Auditor’s Report) Order 2020
◦ SEBI (LODR) Regulation 2015
◦ Form 3CD and Form GSTR 9C (Revised)
◦ Finance Act 2021
◦ Revised Code of Ethics
◦ Revised Statement of Peer Review 2020
Also Available:
• [8th Edition] of Taxmann’s Textbook for Advanced Auditing & Professional Ethics (New Syllabus)
• [6th Edition] of Taxmann’s MCQs & Integrate Case Studies on Advanced Auditing & Professional Ethics (Old/New Syllabus)
• [1st Edition] Taxmann’s Quick Revision Charts for Advanced Auditing & Professional Ethics
• Taxmann’s Combo for Textbook + Cracker + MCQs & Integrated Case Studies
The contents of the book are as follows:
• Quality Control and Engagement Standards
• Audit Planning, Strategy and Execution
• Risk Assessment and Internal Control
• Audit in an Automated Environment
• Professional Ethics
• Company Audit
• Audit Reports
• CARO 2020
• Audit of Consolidated Financial Statements
• Audit of Dividend
• Audit Committee and Corporate Governance
• Liabilities of Auditors
• Internal Audit
• Management and Operational Audit
• Audit under Fiscal Laws
• Due Diligence, Investigation & Forensic Audit
• Peer Review & Quality Review
• Audit of Banks
• Audit of Non-Banking Finance Companies
• Audit of Insurance Companies
• Audit of Public Sector Undertakings
• Questions on Ind-AS
• Questions on Schedule III
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2. PAGE
I-9
CONTENTS
PAGE
Compliance checklist of actions to claim deductions with
extended time-limits for compliances under the Taxation
and Other Laws (Relaxation of Certain Provisions)
Ordinance, 2020 I-31
1
WHICH INCOME IS TAXABLE UNDER THE
HEAD “CAPITAL GAINS”
1.1 Charging sections - Sections 45, 46 and 46A 1
1.2 Conditions to be fulfilled for taxing capital gains under
section 45 2
1.3 Tax-free capital gains 4
1.4 Whether situs/location of a capital asset matters for
taxability of capital gains? 6
2
WHAT IS ‘CAPITAL ASSET’?
2.1 Overview of definition of in Section 2(14) 8
2.2 Scheme of the definition in clause (14) of section 2 8
2.3 Property of any kind held by the assessee 11
2.4 Securities held by a foreign institutional investor 26
2.5 Jewellery is ‘capital asset’, not ‘personal effect’ 27
2.6 Archaeological collections are ‘capital assets’ and not ‘personal
effects’ 29
2.7 Work of art/drawings are capital assets, not personal effects 30
2.8 Paintings are capital assets, not personal effects 31
2.9 Sculptures are capital assets, not personal effects 31
3. PAGE
CONTENTS I-10
2.10 Stock-in-trade [Sub-clause (i) of clause (14)] 31
2.11 Consumable stores or raw materials held for business/
profession are not capital assets [Sub-clause (i)] 39
2.12 Personal effects [Sub-clause (ii) of clause (14)] 39
2.13 Agricultural land in India other than land situate in urban
area [Sub-clause (iii) of clause (14)] 42
2.14 Deposit certificates issued under GMS, 2015 [Sub-clause (vi)
of clause (14)] 66
2.15 Immovable property (except stock-in-trade and rural agricul-
tural land) are capital assets 67
2.16 Silver bars/bullion/sovereigns/silver coins are capital assets
and not personal effects 68
2.17 Silver utensils are personal effects and not capital assets 68
2.18 Agricultural land situated in India in rural area is not a capital
asset 69
3
TYPES OF CAPITAL ASSETS : SHORT-TERM CAPITAL
ASSETS AND LONG-TERM CAPITAL ASSETS
3.1 Distinction between short-term capital gains and long-term
capital gains 70
3.2 Overview of section 2(42A) - Definition of section 2(42A) 70
3.3 Classification of capital asset into short-term capital asset and
long-term capital asset 71
3.4 Capital assets which will be regarded as STCA if held for 24
months or less 72
3.5 Capital assets which will be held as short-term capital assets if
held for 12 months or less before transfer 72
3.6 How to compute the holding period of a capital asset? 73
3.7 Minimum holding period for various assets to qualify as long-
term capital assets 81
3.8 Computation of holding period in case of immovable properties 83
4
WHAT IS ‘TRANSFER’?
4.1 What is ‘transfer’ for capital gains purposes? 85
4. PAGE
I-11 CONTENTS
4.2 Definition of ‘transfer’ in section 2(47) of the Act 85
4.3 Indirect transfers i.e. transfer of rights effected or dependent
upon or flowing from transfer of shares of foreign company 87
4.4 Transactions deemed to be transfers under sub-sections (1A),
(2A), (3) and (4) of section 45 87
4.5 Distribution of assets by a company to its shareholders on its
liquidation is not ‘transfer’ by the company 88
4.6 Meaning of ‘transfer’ 88
4.7 Transfer by sale 89
4.8 Transfer by exchange 90
4.9 Transfer by relinquishment 93
4.10 Extinguishment of any rights in a capital asset 95
4.11 Compulsory acquisition of a capital asset under any law 98
4.12 Conversion of a capital asset into stock-in-trade 105
4.13 The maturity or redemption of a zero coupon bond 105
4.14 Part performance of a contract of sale of immovable property 106
4.15 Transfer of rights in immovable properties through the
medium of co-operative societies, companies, etc. 108
4.16 Transfer by a person to a firm or other association of persons
[AOP] or body of individuals [BOI] 108
4.17 Distribution of capital assets on dissolution 108
4.18 Distribution of money or other assets by the company on
liquidation 108
4.19 Family arrangement - Whether transfer? 109
4.20 Firm/partner transactions - Whether ‘transfer’ involved 109
4.21 Shareholder/company transactions 112
4.22 Date of transfer 114
5
WHICH TRANSFERS DO NOT GIVE RISE
TO TAXABLE CAPITAL GAINS
5.1 Transfers which do not give rise to taxable capital gains 120
5.2 Distribution by a HUF on Total/Partial Partition 124
5.3 Transfer of capital asset under a gift or a will or irrevocable
trust 125
5. PAGE
CONTENTS I-12
5.4 Transfers of capital assets between a parent company and its
100% subsidiary company 126
5.5 Transfer of capital asset by amalgamating company to
amalgamated company 132
5.6 Transfer of shares held in an Indian Company by amalgama-
ting foreign Co. to amalgamated foreign Co. 133
5.7 Transfer on amalgamation of banking company with a
banking institution 134
5.8 Transfer by demerged company to resulting Indian company 134
5.9 Transfer of shares by demerged foreign company to resulting
foreign company 137
5.10 Transfer in reorganization of co-operative banks 137
5.11 Transfer of shares in amalgamation or demerger of Co-opera-
tive Banks 138
5.12 Transfer by a shareholder in a scheme of amalgamation 138
5.13 Transfer outside India by non-resident of bonds/GDRs to
another non-resident 140
5.14 Transfer of Rupee Denominated Bonds outside India by one
non-resident to another non-resident 140
5.15 Exemption from tax to transfer of G-Sec. by one non-resident
to another - Section 47(viib) 140
5.16 Transfer of works of art, etc. 141
5.17 Conversion of bonds, debentures, debenture-stock or deposit
certificates into shares or debentures 142
5.18 Conversion of FCCBs into shares/debentures 142
5.19 Conversion of preference shares to equity shares [Section
47(xb)] 142
5.20 Transfer of land of sick industrial company 143
5.21 Succession of firm by company 143
5.22 Transfer of capital asset by AOP/BOI in course of demutuali-
zation/corporatization of stock exchange 148
5.23 Transfer of membership right in recognized stock exchange 148
5.24 Conversion from general partnership to LLP - Whether gives
rise to taxable capital gains? 148
5.25 Conversion of private company/unlisted public company into
LLP 149
5.26 Transfer of proprietorship to company 158
5.27 Transfer in a scheme for lending of any securities 159
6. PAGE
I-13 CONTENTS
5.28 Reverse mortgage transactions by senior citizens - i.e. indivi-
duals aged 60 years or more 160
5.29 Taxation of capital gains arising to sponsor on conversion of
SPV shares into units of business trust [Section 47(xvii)] 162
5.30 Tax neutrality on merger of similar schemes of Mutual Funds 163
5.31 Tax neutrality on merger or consolidation of plans within a
scheme of a mutual fund 163
6
YEAR OF TAXABILITY OF CAPITAL GAINS
6.1 Capital gains is taxable in the year of transfer of capital asset
subject to certain exceptions 164
6.2 Insurance claim 165
6.3 Conversion of asset into stock-in-trade 167
6.4 Transfer by depository or participant of beneficial interest in
securities 168
6.5 Transfer of assets by way of capital contribution 169
6.6 Distribution of assets on dissolution of Firm LLP/AOP/BOI
or otherwise 170
6.7 Compulsory acquisition 172
6.8 Enhanced compensation on compulsory acquisition 173
6.9 Year of taxability of capital gains when owner of land transfers
land to developer under Joint Development Agreement 175
6.10 Entitlement to goodwill 177
6.11 Transfer by partner of right in firm’s asset for consideration
payable in instalments 177
6.12 Accrual of right to receive profits determinative 178
6.13 Sale of part of asset 178
7
COMPUTATION OF CAPITAL GAINS - SHORT-TERM CAPITAL
GAINS AND LONG-TERM CAPITAL GAINS
7.1 Tax incidence depends upon whether capital gains is long-term
capital gains or short-term capital gains 179
7.2 How to compute short-term capital gains 181
7. PAGE
CONTENTS I-14
7.3 How to compute long-term capital gains other than long-term
capital gains taxable under section 112A 181
7.4 How to compute long-term capital gains in respect of listed
equity shares, equity-oriented MFs and units of business trust
u/s 112A 181
7.5 Cases in which benefit of indexation of cost of acquisition/
cost of improvement is not available for computing long-
term capital gains 182
7.6 Surcharge applicable on capital gains tax in respect of indivi-
dual, HUF, AOP, BOI and AJP for A.Y. 2020-21 183
7.7 Changes made by the Finance Act, 2020 W.E.F. AY 2021-22 196
8
HOW TO COMPUTE FULL VALUE OF
CONSIDERATION
8.1 Existence of consideration - A prerequisite for taxability as
capital gains 199
8.2 ‘Consideration’ 201
8.3 Full value of consideration 202
8.4 Deemed full value of consideration - Situations where a
deemed amount shall be full value of consideration 204
8.5 Computation of capital gains in real estate transactions -
Section 50C 207
8.6 Fair market value 216
8.7 Special provision for full value of consideration for transfer
of unquoted share - Section 50CA 216
8.8 Where the consideration is not ascertainable or cannot be
determined - Section 50D 220
8.9 Conversion by the owner of a capital asset into, or its treat-
ment as, stock-in-trade of a business carried on by him
[Section 45(2)] 222
8.10 Compulsory acquisition under any law for the time being in
force - Section 45(5) 223
8.11 Contribution of capital asset to firm/LLP/AOP/BOI by
partner/member - Section 45(3) 225
8.12 Distribution of capital assets on dissolution of firm/LLP/
AOP/BOI - Section 45(4) 227
8.13 Insurance claim received in respect of capital asset destroyed
by act of god etc. - Section 45(1A) 230
8. PAGE
I-15 CONTENTS
8.14 Transfer by way of distribution of assets by company in liqui-
dation to its shareholders - Section 46(2) 232
8.15 Full value of consideration where assessee-buyer gets excess
amount of compensation received by seller over agreed sale
consideration where land agreed to be bought is acquired. 232
9
WHAT IS EXPENDITURE ON TRANSFER OF
CAPITAL ASSETS?
9.1 Expenditure incurred wholly and exclusively in connection
with the ‘transfer’ is deductible 234
9.2 Interest paid on borrowings for acquisition of capital asset -
Whether deductible 235
9.3 Payment to tenant to get property vacated - Whether deduc-
tible 235
9.4 Legal expenses incurred for obtaining compensation for
compulsory acquisition - Whether deductible 236
9.5 Expenditure incurred for obtaining probate of the will -
Whether deductible 237
9.6 Transfer charges paid to co-operative society - Whether
deductible 238
9.7 Expenditure incurred before or after passing of title -
Whether deductible 238
9.8 Liability/obligation - Whether deductible 238
9.9 Interest on provident fund loan - Whether deductible 239
9.10 Damages for mental agony and suffering - Whether
deductible 239
9.11 Expenses on staff after the takeover of undertaking 239
9.12 Where option under section 55(2)(b)(i) is exercised 240
9.13 Payment for freeing property of encumbrance - Whether
deductible 240
9.14 Payment for release of interest - Whether deductible 243
9.15 Brokerage - Whether deductible 243
9.16 Assumed value of solatium 243
9.17 Amount embezzled 244
9.18 Interest on delayed payment of unearned increase 244
9. PAGE
CONTENTS I-16
10
WHAT IS COST OF ACQUISITION?
10.1 Meaning/definition of cost of acquisition 245
10.2 Ground rent - Whether deductible as COA 253
10.3 Interest on moneys borrowed to purchase asset - Whether
deductible as COA 253
10.4 Interest paid to partners - Whether COA 254
10.5 Payment to estate of deceased partner - Whether COA 254
10.6 Litigation expenses to register transfer of shares is COA of
shares 254
10.7 Payment having no connection with the capital asset 254
10.8/9 Income-tax dues - Whether COA 255
10.10 Sums paid under will - Whether COA 255
10.11 Urban land tax and other taxes - Whether COA 256
10.12 Cost of acquisition of shares obtained in family settlement 256
10.13 Subsequent events do not affect cost of acquisition 256
10.14 Date of acquisition 257
10.15 COA where asset becomes capital asset after acquisition but
before sale 257
10.16 Cases in which the Act deems cost of acquisition of capital
asset to be nil 258
10.17 Cases in which cost of acquisition deemed to be cost to
the previous owner 259
10.18 Cost of acquisition of shares of amalgamated company in
exchange for shares of amalgamating company - Section 49(2) 273
10.19 Cost of shares/debentures acquired on conversion of bonds/
debentures/deposit certificates/FCCBs into shares/deben-
tures - Section 49(2A) 273
10.20 Cost of acquisition of ESOPs/sweat equity shares - Section
49(2AA)/section 49(2AB) 273
10.21 Cost of acquisition in case of unit of business trust acquired
by sponsor in exchange for shares in SPV 274
10.22 Cost of acquisition of shares in the resulting company in a
demerger and cost of original shares in demerged company 274
10.22A Cost of acquisition where the provisions of section 47A are
applicable 275
10. PAGE
I-17 CONTENTS
10.23 Cost of acquisition of intangible assets purchased 275
10.24 Capital asset acquired by a shareholder on distribution of its
assets in liquidation - Section 55(2)(b)(iii) 275
10.25 Where conditions for exemption of transfers between parent
and its 100% subsidiary are violated subsequently 277
10.26 Cost of acquisition of shares acquired on stock-splits etc. 277
10.27 Cost of acquisition of rights shares 278
10.28 Cost of acquisition of capital asset acquired very long ago 279
10.29 Cost of acquisition of immovable property taxed as gift 283
10.30 Cost of acquisition of jewellery, bullion, shares and securities,
paintings, sculptures etc. taxed as gifts under section
56(2)(vii)/(viia)/(x) 285
10.31 Cost of acquisition in case of depreciable assets on which
depreciation allowed at SLM rates - Section 50A 288
10.32 Cost of acquisition in case of slump sale - Section 50B 288
10.33 Where enhanced compensation is received 289
10.34 Cost of acquisition of certain assets - Calves, colts, trees etc. 289
10.35 Shares acquired by non-resident assessee on redemption
of GDRs 290
10.36 Tax neutrality on merger of similar schemes of Mutual Funds 290
11
WHAT IS COST OF IMPROVEMENT?
11.1 Cost of improvement - Definition 292
11.2 Allowance of deduction 294
11.3 Expenses incurred by persons other than assessee 295
11.4 Improvement of title 296
11.5 Assets acquired before 1-4-1981 and transferred in any
previous year relevant to AYs 1992-93 to 2017-18 297
11.6 Assets acquired before 1-4-1981 and transferred in any
previous year relevant to AY 2018-19 or subsequent AY 298
11.7 Assets acquired after 1-4-1981 but on or before 31-3-2001
and transferred in any previous year relevant to AY 2018-19
or subsequent AY 299
11.8 Assets acquired after 1-4-2001 299
11.9 Expenditure not allowable as deduction 300
11. PAGE
CONTENTS I-18
11.10 Taxability of advance for transfer of a capital asset where
advance is forfeited (Sections 51 and 56) 300
12
WHAT IS INDEXED COST OF ACQUISITION AND
INDEXED COST OF IMPROVEMENT?
12.1 Indexation benefit for computing long-term gains - Relief
from inflation 301
12.2 Cases in which indexation benefit is not available for compu-
ting long-term capital gains 301
12.3 Indexed cost of acquisition/improvement - Meaning of 302
12.4 Indexation benefit linked to period of holding of asset and not
to its owner 304
12.5 Computation of indexed cost of acquisition/improvement 307
13
ROLLOVER DEDUCTION IN RESPECT OF PROFIT
ON SALE OF PROPERTY USED FOR RESIDENCE
[SECTION 54]
13.1 Provisions of section 54 in a nutshell 310
13.2 Conditions to be fulfilled for availing deduction under the
regular section 54 scheme 319
13.3 Profit on sale of property used for residence [Section 54] 319
13.4 Sale of new residential house within 3 years 343
13.5 Capital Gains Accounts Scheme 346
13.6 Extension of time for acquiring new asset or depositing or
investing capital gain [Section 54H] 349
13.7 Assessee availing section 54 relief required to file ITR w.e.f.
AY 2020-21 even if his total income after relief is below
threshold exemption limit 350
13.8 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54 in assessment proceedings 351
13.9 Claim under wrong provision of section 54F will not bar
deduction under section 54 351
12. PAGE
I-19 CONTENTS
14
DEDUCTION OF ROLLOVER OF GAIN ON TRANSFER
OF LAND USED FOR AGRICULTURAL
PURPOSES [SECTION 54B]
14.1 Provisions of section 54B in brief 353
14.2 Gain on transfer of land used for agricultural purposes 353
14.3 Quantum of deduction under section 54B 355
14.4 Tax implications of sale of new land within 3 years 360
14.5 Who can claim the exemption under section 54B 361
14.6 Use of land for agricultural purposes in two years imme-
diately preceding transfer 361
14.7 Whether new land purchased should be in assessee’s
name only to qualify for section 54B deduction? 363
14.8 Purchase of new land before sale of old land 363
14.9 Capital Gains Accounts Scheme 364
14.10 Extension of time for acquiring new asset or depositing
or investing capital gain 366
14.11 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54B in assessment proceedings 367
14.12 Claim under wrong provision will not bar deduction under
section 54B 368
14.13 Assessee availing section 54B relief required to file ITR w.e.f.
AY 2020-21 even if his total income after relief is below
threshold exemption limit 368
15
ROLLOVER DEDUCTION IN RESPECT OF CAPITAL
GAIN ON COMPULSORY ACQUISITION OF LANDS
AND BUILDINGS [SECTION 54D]
15.1 Provisions of section 54D in a nutshell 370
15.2 Conditions to be fulfilled for claiming deduction u/s 54D in
respect of capital gain on compulsory acquisition of lands
and buildings 371
15.3 Quantum of deduction 373
15.4 Tax implications on sale of new asset within 3 years 377
15.5 Who can claim the exemption under section 54D 378
13. PAGE
CONTENTS I-20
15.6 Industrial undertaking - Meaning of 378
15.7 Enhanced compensation 380
15.8 Exemption in case of depreciable assets 381
15.9 Capital Gains Accounts Scheme 382
15.10 Extension of time for acquiring new asset or depositing or
investing capital gain 385
15.11 Assessee availing section 54D relief required to file ITR w.e.f.
AY 2020-21 even if his total income after relief is below
threshold exemption limit 386
15.12 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54D in assessment proceedings 387
15.13 Claim under wrong provision will not bar deduction under
section 54D 388
16
ROLLOVER DEDUCTION IN RESPECT OF INVEST-
MENT OF LONG-TERM CAPITAL GAINS FROM
LAND OR BUILDING OR BOTH IN SPECIFIED
BONDS [SECTION 54EC]
16.1 Provisions of section 54EC in a nutshell 389
16.2 Pre-conditions for deduction under section 54EC 390
16.3 Ceiling on investment - ` 50 lakhs in a financial year 391
16.4 Transfer of specified asset within lock-in period of 5 years 393
16.5 Whether capital gains arising under section 50 is long-term
capital gains for section 54EC purposes? 394
16.6 Time-limit of 6 months for investment in specified bonds
under section 54EC means 6 calender months and not
180 days 394
16.7 Name in which bonds should be purchased 397
16.8 Specified bonds for investment under section 54EC 399
16.9 Direct nexus not required 399
16.10 Extension of time for acquiring new asset or depositing or
investing capital gain 400
16.11 Assessee availing section 54EC relief required to file ITR
w.e.f. AY 2020-21 even if his total income after relief is
below threshold exemption limit 401
14. PAGE
16.12 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54EC in assessment proceedings 402
16.13 Claim under wrong provision will not bar deduction under
section 54EC 402
17
CAPITAL GAINS NOT TO BE CHARGED ON INVEST-
MENT IN UNITS OF A SPECIFIED FUND
17.1 Backdrop 403
17.2 Capital gains exemption on investment in specified funds -
Section 54EE 404
18
DEDUCTION IN RESPECT OF LONG TERM CAPITAL
GAIN INVESTED IN RESIDENTIAL
HOUSE [SECTION 54F]
18.1 Provisions of section 54F in brief 406
18.2 Long term capital gain invested in residential house 407
18.3 Conditions for deduction 407
18.4 Quantum of deduction 408
18.5 Net consideration 412
18.6 Purchase/construction of second residential house 412
18.7 Date of purchase of new house 413
18.8 Sale of second vacant land and investment in second
dwelling unit 414
18.9 Exemption for minor 414
18.10 No deduction for extension of house 414
18.11 Transfer of new residential house 414
18.12 Whether deduction is available if new house purchased in
joint names of assessee and his wife? 415
18.13 Capital Gains Accounts Scheme 415
18.14 Extension of time for acquiring new asset or depositing or
investing capital gain 419
I-21 CONTENTS
15. PAGE
18.15 Assessee availing section 54F relief required to file ITR w.e.f.
AY 2020-21 even if his total income after relief is below
threshold exemption limit 420
18.16 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54F in assessment proceedings 421
18.17 Claim under wrong provision will not bar deduction under
section 54F 421
19
TAX INCENTIVES FOR TRANSFER OF ASSETS ON
SHIFTING OF INDUSTRIAL UNDERTAKINGS
FROM URBAN AREA/SHIFTING OF
INDUSTRIAL UNDERTAKING FROM
URBAN AREA TO ANY SPECIAL
ECONOMIC ZONE (SEZ)
[SECTION 54G/54GA]
19.1 Provisions of section 54G/54GA in brief 422
19.2 Transfer of assets on shifting of industrial undertakings
[Section 54G] 423
19.3 Conditions for deduction under section 54G 424
19.4 Quantum of deduction under section 54G 425
19.5 Sale of new asset within three years-tax implications 430
19.6 Shifting of industrial undertaking from urban area to any
Special Economic Zone (SEZ) [Section 54GA] 431
19.7 Capital Gains Accounts Scheme 434
19.8 Assessee availing section 54G/54GA relief required to file
ITR w.e.f. AY 2020-21 even if his total income after relief is
below threshold exemption limit 436
19.9 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54G or u/s 54GA in assess-
ment proceedings 437
19.10 Claim under wrong provision will not bar deduction under
section 54G/Section 54GA 438
CONTENTS I-22
16. PAGE
20
TAX EXEMPTION FOR CAPITAL GAINS FROM SALE OF
RESIDENTIAL PROPERTY IF INVESTED IN CAPITAL
OF START-UP COMPANY - SECTION 54GB
20.1 Tax Exemption for long-term capital gains from selling resi-
dential property if the same is invested in equity shares
of start-up company 441
20.2 Conditions to be satisfied for availing tax relief in respect
of capital gains by investment in shares of a company
which is “eligible start-up” 442
20.3 Promoter selling his residential property and investing
monies in its shares- is it efficient from point of view
of explaining “source of source” under section 68 444
20.4 Assessee availing section 54GB relief required to file ITR
w.e.f. AY 2020-21 even if his total income after relief is
below threshold exemption limit 444
20.5 Non-disclosure of capital gains in ITR will not bar assessee
from claiming deduction u/s 54GB in assessment
proceedings 445
20.6 Claim under wrong provision will not bar deduction under
section 54GB 446
20.7 FAQs on section 54GB 446
21
POWER OF CBDT TO RELAX ANY REQUIREMENT
FOR CLAIMING DEDUCTIONS
21.1 Power of CBDT under section 119(2)(c) 448
21.2 Section 119(2)(c) applies to sections 54 to 54GB 449
21.3 Application for relief on plain paper 449
22
TAX COMPUTATION IN RESPECT OF STCG
22.1 Tax on short-term capital gains 450
22.2 Equity Oriented Fund 451
I-23 CONTENTS
17. PAGE
23
TAX COMPUTATION IN CASE OF LONG-TERM
CAPITAL GAINS
23.1 Overall scheme of tax computation on LTCG 452
23.2 Tax on long-term capital gains from shares, securities and
units 453
23.3 Tax on long-term capital gains other than from shares,
securities and units 454
23.4 Concessional tax rate of 10% not applicable to long-term
capital gains from units of GETFs/Debt-oriented mutual
funds - Section 112(1) 454
24
LONG-TERM CAPITAL GAINS TAX ON LISTED
EQUITY SHARES, UNITS OF EQUITY-ORIENTED
MUTUAL FUNDS AND UNITS OF BUSINESS TRUSTS
24.1 Taxation of long-term capital gains from listed equity shares
and units of equity-oriented MFs upto AY 2018-19 456
24.2 New Scheme of taxation of long-term capital gains from
listed equity shares, units of equity-oriented MFs and units
of business trusts - Section 112A 456
24.3 Rationale behind the introduction of new scheme of
taxation by the Finance Act, 2018 459
24.4 Conditions for applicability of new section 112A 459
24.5 Computation of tax 461
24.6 Computation of LTCG 462
24.7 Cost of acquisition (COA) of specified assets 462
24.8 New Section overrides section 112 464
24.9 Applicability of new section to different assessees 465
24.10 Applicability of section 112 in certain cases 467
24.11 Computation of long-term capital gains under the New
Section 469
24.12 Condition (b) : The total income of the assessee should
include income chargeable as capital gains 474
24.13 Condition (c) : The asset has to be long term capital asset 480
CONTENTS I-24
18. PAGE
24.14 Condition (d) : Section 112A applies only if LTCG arises
from “Specified Asset” 481
24.15 Condition (e) : Section 112A is applicable if STT is paid 482
24.16 FAQs on Cost of acquisition of specified assets 488
24.17 Computation of tax if section 112A applies 509
24.18 Deductions under Chapter VI-A are not available qua
capital gains under section 112A 515
24.19 Rebate under section 87A 515
24.20 Taxation of non-residents 516
24.21 Miscellaneous 521
24.22 Taxation of long term capital gains in the case of foreign
institutional investor 523
25
REFERENCE TO VALUATION OFFICER
25.1 Statutory provisions 525
25.2 Valuation Officer 526
25.3 Valuation procedure 528
25.4 Purpose for which reference may be made 528
25.5 Binding nature of Valuation Officer’s report 532
25.6 Where assessment is completed before receipt of valuation
report 533
25.7 Where valuation report is not received 533
25.8 Reference after assessment 533
25.9 Reference cannot be made without giving opportunity and
disclosing reasons 534
25.10 Second reference 535
25.11 Appeal 535
25.12 Appearance by registered valuer 536
25.13 Rectification of mistakes 536
25.14 Power to take evidence on oath, etc. 537
I-25 CONTENTS
19. PAGE
26
LOSS UNDER THE HEAD ‘CAPITAL GAINS’
26.1 Loss under the head ‘Capital gains’ - Whether same as
capital loss 538
26.2 Carry forward and set-off of losses under the head ‘Capital
gains’ 539
26.3 On Liquidation of Company 544
26.4 Revaluation of Investment 544
26.5 Where transaction of sale is genuine 545
26.6 Sum assessed as dividend under section 2(22) 546
26.7 Carry forward and set off 547
27
DISTRIBUTION OF ASSETS BY COMPANIES
IN LIQUIDATION
27.0 Introduction 549
27.1 Coverage of section 46(2) 549
27.2 Nature of asset in the hands of shareholders 550
27.3 Liquidation of subsidiary company and application of
section 46 550
27.4 Realisation of asset by liquidator 551
27.5 Distinction between ‘a company in liquidation’ and ‘a
company on liquidation’ 552
27.6 Section 46(2) - A deeming provision 553
27.7 Section 46(2) is a charging provision 555
27.8 Liability to capital gains 556
28
HOW TO COMPUTE CAPITAL GAINS IN CASE OF BUY-
BACK OF SHARES/SPECIFIED SECURITIES
28.1 What is buy-back? 560
28.2 Tax implications of buy-back for shareholder - Section 46A 560
28.3 Withholding tax of 20% of profits distributed by companies
through buyback of shares 562
CONTENTS I-26
20. PAGE
I-27 CONTENTS
28.4 Amount received by the company in respect of issue of
share which is the subject of buyback 563
29
CAPITAL GAIN AND DEPRECIABLE ASSETS
29.1 Introduction 567
29.2 Statutory provisions of section 50 567
29.3 Power generation undertakings [Section 50A] 572
29.4 Legal decisions - In assessee’s favour 574
29.5 Legal decisions - In Revenue’s favour 576
30
SLUMP SALE
30.1 Introduction 578
30.2 Slump sale - Definition 578
30.3 Computation of capital gain from slump sale [Section 50B] 579
30.4 Negative Net Worth 582
30.5 Complete sale of unit or undertaking is a must 583
30.6 Lock, stock and barrel sale 583
30.7 Comparative study of slump sale and demerger 585
31
CAPITAL GAIN ON INTANGIBLE ASSETS
31.1 Goodwill 586
31.2 Route permits/stage carriage permits 588
31.3 Import licences/entitlements 588
31.4 Rights under a contract 588
31.5 Tenancy rights 589
31.6 Loom hours 590
31.7 Leasehold rights 590
31.8 Life interests 592
31.9 Remainderman’s reversionary interest 592
21. PAGE
CONTENTS I-28
31.10 Devaluation gain 593
31.11 Patent 593
31.12 Right to manufacture, produce or process any article or
thing 593
31.13 Right to carry on any business or profession 594
32
CHARITABLE TRUST AND CAPITAL GAINS
32.1 Introduction 595
32.2 Trust wholly for charitable or religious purposes [Section
11(1A)(a)] 595
32.3 Trust in part for charitable or religious purposes [Section
11(1A)(b)] 596
32.4 Capital gains kept in fixed deposit in bank 597
32.5 Capital gain kept as deposit in public sector companies 598
32.6 Capital gain used for redeeming pledged asset 598
32.7 Capital gain used for acquiring English Mortgage 599
32.8 Advance receipt of sale proceeds used for regular objects 600
32.9 Time limit for reinvestment 601
32.10 Sub-section (7) of section 11 602
33
CAPITAL GAIN IN REAL ESTATE TRANSACTIONS
33.1 Immovable property 603
33.2 Period of holding immovable property before transfer to
maximize tax advantages 603
33.3 Entering an agreement to sell does not transfer the property 604
33.4 Cash component of consideration should be less than
Rs. 20,000 to avoid violation of section 269SS 604
33.5 Immovable property transactions between firm/LLP and
partners 605
33.6 Membership of Co-operative Society 606
33.7 Mortgage transactions 607
33.8 Reverse Mortgage 607
22. PAGE
I-29 CONTENTS
33.9 Agricultural land 608
33.10 Deemed transfers 609
33.11 Deemed sale consideration - Section 50C 610
33.12 Section 50C vis-a-vis transfers under section 45(2), 45(3)
and 45(4) 610
33.13 Exemptions under sections 54, 54EC and 54F 611
33.14 Development agreements (Joint Development Agreements) 613
33.15 Lease right 614
33.16 99 years lease 615
33.17 Sub-lease for 97 years 615
33.18 Composite consideration 616
33.19 Single transaction - Whether business 617
33.20 Repurchase of sold property 618
33.21 Mortgage followed by sale 619
33.22 Where auction sale is set aside 620
APPENDICES
APPENDIX 1 : Taxation and Other Laws (Relaxation of Certain
Provisions) Ordinance, 2020 625
APPENDIX 2 : Section 3 of the Taxation and Other Laws (Relaxation
of Certain Provisions) Ordinance, 2020 - Relaxation
of certain provisions of specified Acts - Notified dates
for extension of due dates of various completions or
compliances under specified Acts 630
23. C H A P T E R
3
TYPES OF CAPITAL ASSETS :
SHORT-TERM CAPITAL ASSETS AND
LONG-TERM CAPITAL ASSETS
3.1 Distinction between short-term capital gains and long-term
capital gains
Section 2(42B) of the Act defines ‘short-term capital gain’ to mean
‘capital gain arising from the transfer of a short-term capital asset’.
Section 2(29B) defines ‘long-term capital gain’ as ‘capital gain arising
from the transfer of a long-term capital asset’. Section 2(29A) of the Act
defines ‘long-term capital asset’ as capital asset which is not a short-term
capital asset.
Transfer of a short term capital asset [Para 3.3] gives rise to ‘Short Term
Capital Gains’ (STCG) and transfer of a long term capital asset gives rise
to ‘Long Term Capital Gains’ (LTCG). Identifying gains as STCG and
LTCG is a very important step in computing the income under the head
Capital Gains as method of computation of gains and tax payable on the
gains and treatment of losses is different for STCG and LTCG.
It may be mentioned that long-term capital gains gets more favourable
tax treatment as compared to short-term capital gains.
3.2 Overview of section 2(42A) - Definition of section 2(42A)
u General rule : Holding period of 36 months or less before transfer
to qualify as short-term asset [Para 3.3]
70
24. u Exceptions to the general rule of 36 months or less holding period:
n 1st proviso : The following assets to be regarded as short-
term capital assets if held for 12 months or less before
transfer [Para 3.4]
l Security (other than a unit ) listed on a recognised
stock exchange in India
l Units of UTI
l Units of equity oriented mutual funds
l Zero Coupon Bond
n 2nd proviso: Holding period of 12 months or less for unlisted
shares and units of mutual fund units transferred during
the period 01.04.2014 to 10.07.2014
n 3rd proviso: Unlisted shares of companies and immovable
property to be regarded as short-term capital assets if held
for 24 months or less before transfer. [Para 3.5]
u Explanation 1: How to compute the holding period..what periods
of time to be included or excluded [Paras 3.6 to 3.6-18]
u Minimum holding period for various assets to qualify as long-term
capital assets [Para 3.7]
u Explanation 2: Definition of ‘security’ [Para 3.7-1]
u Explanation 3: Definition of ‘specified security’ and ‘sweat equity
shares’ [Para 3.6-8]
u Explanation 4: Definition of ‘equity-oriented fund [See Chapter
24]
3.3 Classification of capital asset into short-term capital asset
and long-term capital asset
The incidence of tax on Capital Gains depends upon the length of the
time period for which the capital asset was held before the transfer. In
terms of section 2(42A) which defines a ‘short-term capital asset’,
ordinarily,acapitalassetheldfor36monthsorlessiscalleda‘short-term
capital asset’ and the capital asset held for more than 36 months is called
‘long-term capital asset’.
Exceptionstothe“36monthsorlessholdingperiod”ruleisgiveninParas
3.4 and 3.5 below.
71 CLASSIFICATION OF CAPITAL ASSET Para 3.3
25. 3.4 Capital assets which will be regarded as STCA if held for 24
months or less
The following assets shall be regarded as short-term capital assets if
held for 24 months or less and long-term assets if held for more than 24
months:
u Unlisted shares of companies (share of a company not listed in a
recognized stock exchange in India)
u Immovable property, being land or building or both. [See Para 3.8]
3.5 Capital assets which will be held as short-term capital assets
if held for 12 months or less before transfer
The following assets shall be regarded as short-term capital assets if
held for 12 months or less and long-term assets if held for more than 12
months:
u Security (other than a unit) listed in a recognized stock exchange
in India
u Unit of UTI
u Unit of equity-oriented mutual funds
u Zero Coupon bond [Para 3.5-2]
Units of debt-oriented mutual funds, GETFs/REITs/InVITs to be held
for more than 36 months to qualify as long-term capital assets - Section
2(42A)
3.5-1 Securities transacted through stock exchanges
When the securities are transacted through stock exchanges it is the
established procedure that the brokers first enter into contracts for
purchase/sale of securities and thereafter, follow it up with delivery of
shares, accompanied by transfer deeds duly signed by the registered
holders. The seller is entitled to receive the consideration agreed to as on
the date of contract. Thus, it is the date of broker’s note that should be
treated as the date of transfer in case of sale transactions of securities
provided such transactions are followed up by delivery of shares and
also the transfer deeds. Similarly, in respect of the purchasers of the
securities, the holding period shall be reckoned from the date of the
broker’s note for purchase on behalf of the investors. In case the trans-
actions take place directly between the parties and not through stock
exchanges the date of contract of sale as declared by the parties shall be
Para 3.5 TYPES OF CAPITAL ASSETS 72
26. treated as the date of transfer provided it is followed up by actual deliv-
ery of shares and the transfer deeds.
Where securities are acquired in several lots at different points of time,
the First-in-first-out (FIFO) method shall be adopted to reckon the
period of the holding of the security, in cases where the dates of pur-
chase and sale could not be correlated through specific numbers of the
scrips.Inotherwords,theassetsacquiredlastwillbetakentoberemain-
ing with the assessee while assets acquired first will be treated as sold.
Indexation, wherever applicable, for long-term assets will be regulated
on the basis of the holding period determined in this manner - Circular
: No. 704, dated 28-4-1995.
3.5-2 Zero Coupon Bond
According to section 2(48) of the Act, “zero coupon bond” means a bond-
(a) issued by any infrastructure capital company or infrastructure
capital fund or public sector company or scheduled bank on or
after the 1st day of June, 2005;
(b) in respect of which no payment and benefit is received or receiv-
able before maturity or redemption from infrastructure capital
company or infrastructure capital fund or public sector company
or scheduled bank; and
(c) which the Central Government may, by notification in the Official
Gazette, specify in this behalf.
3.6 How to compute the holding period of a capital asset?
In Bharti Gupta Ramola v. CIT [2012] 20 taxmann.com 762, the Delhi
High Court held that the holding period of a capital asset (36 months/24
months/12 months) to be computed as under:
u Holdingperiodofcapitalassetu/s2(42A)(36months/24months/
12 months) to be reckoned in calendar months by including both
date of its acquisition and date of its transfer and without
excluding even a fraction of a day.
u The term ‘month’ has not been defined in the Act and, therefore,
‘month’ would have to be understood in the sense of ‘calendar
month’asdefinedinsection3(35)oftheGeneralClausesAct,1897.
u Period of 12 calendar months would begin on the day when the
assessee became the holder of the asset and end one day before in
73 COMPUTE HOLDING PERIOD OF CAPITAL ASSET Para 3.6
27. the relevant calendar month, next year. Thus, if an assessee
acquires an asset on 2nd January in a preceding year, the period
of 12 months would be complete on 1st January, next year and not
on 2nd January. This position will apply to all cases, except when
an asset is transferred/purchased on 1st January. In such cases,
the period of one year or 12 months would expire and would be
complete on 31st December in the same year.
u There is nothing in section 2(42A) to show that the time period
would not include fraction of a day.
3.6-1 Computation of holding period of share held in a company in liquidation
In the case of a share held in a company in liquidation, the period
subsequent to the date on which the company goes into liquidation shall
be excluded in determining the period for which such share was held by
the assessee. [Explanation 1(i)(a) to section 2(42A)]. In other words, the
date on which company goes into liquidation shall be included in
computing the holding period for determining whether the share was
held for 12 or 24 months or less or for more than 12/24 months.
3.6-2 Computation of holding period of a capital asset which becomes the
property of the assessee in the circumstances mentioned in section 49(1)
A capital asset may becomes the property of an assessee in the circum-
stances mentioned in section 49(1) viz :
(A) on any distribution of assets on the total or partial partition of a
Hindu undivided family;
(B) under a gift or will;
(C)(a) by succession, inheritance or devolution, or
(b) on any distribution of assets on the liquidation of a company, or
(c) under a transfer to a revocable or an irrevocable trust, or
(d) under any such transfer as is referred to in clause (iv) or clause (v)
[Para 5.4] or clause (vi) [Para 5.5] or clause (via) [Para 5.6] or
clause (viaa) [Para 5.7] or clause (viab) [Para 5.1] or clause (vib)
[Para 5.8] or clause (vic) [Para 5.9] or clause (vica) [Para 5.10] or
clause (vicb) [Para 5.11] or clause (vicc) [Para 1.4] or clause (xiii)
or clause (xiiib) [Para 5.21/Para 5.22] or clause (xiv) [Para 5.26] of
section 47;
Para 3.6 TYPES OF CAPITAL ASSETS 74
28. (D) such assessee being a Hindu undivided family, by the mode
referred to in sub-section (2) of section 64 - i.e. conversion of self-
acquired property of member of HUF into HUF property.
In above cases, the period for which the asset was held by the previous
owner shall be included in determining the period for which such asset
was held by the assessee. [Explanation 1(i)(b) to section 2(42A)]. The
expression ‘previous owner of the property’ in relation to any capital
asset owned by an assessee means the last previous owner of the capital
asset who acquired it by a mode of acquisition other than that referred
to section 49(1) - i.e. (A) to (D) above.
3.6-3 Computation of holding period of a capital asset resulting from conver-
sion of inventory into capital asset
In case of conversion of inventory into capital asset or treatment of
inventory as capital asset, the period for which the resulting capital
asset is held shall be reckoned from the date of such conversion or
treatment. [Explanation 1(i)(ba) to section 2(42A)]
3.6-4 Computation of holding period of a share or shares in an Indian company
whichbecomesassessee’spropertyasconsiderationfortransferinamalgam-
ation of companies
If a share or shares in an Indian company (amalgamated company)
becomes property of assessee (who was a shareholder of amalgamating
company) as consideration for his shares in amalgamating company
[See section 47(vii)], the period for which shares in amalgamating
company were held by the assessee shall be included in determining the
holding period of shares in amalgamated company. [Explanation 1(i)(c)
to section 2(42A)].
For example, Mr. X is a shareholder of ABC Ltd. (amalgamating com-
pany) and holds 100 shares in it. He had acquired it two years back. ABC
Ltd. is amalgamated into PQR Ltd., an Indian company and he receives
50sharesinPQRLtd.asconsiderationforhis100sharesinABCLtd.This
transfer of ABC Ltd. shares for PQR Ltd. shares is exempt from taxation
as capital gains under section 47(vii). Suppose he sells the shares of PQR
Ltd. after 6 months. In this case, the holding period of 2 years of shares
in ABC Ltd. should be added to the 6 months holding period of shares in
PQR Ltd. and holding period of shares of PQR Ltd. shall be treated as 2
years and 6 months and hence shares of PQR Ltd. shall be treated as
long-term asset.
75 COMPUTE HOLDING PERIOD OF CAPITAL ASSET Para 3.6
29. 3.6-5 Computation of holding period in case of rights shares/other security
issued on rights basis
In the case of a share or any other security (‘financial asset’) subscribed
to by the assessee on the basis of his right to subscribe or by the
renouncee of the right to subscribe (i.e. the person in whose favour the
right to subscribe is renounced by the assessee), the period shall be
reckoned from the date of allotment of such financial asset for deter-
mining whether the financial asset was held for 12 months or less or for
more than 12 months. [Explanation 1(i)(d) to section 2(42A)]
The words used are ‘from the date of allotment’. A question arises
whether date of allotment is to be included in the holding period or not.
Stroud’s Judicial Dictionary defines “from the date of ……” as under:
“From the date of incorporation of the company” in section 16, Companies
(Consolidation) Act, 1908 (c. 69) - see now Companies Act, 1985 (c. 6), section
13 - held to include any portion of the day on which the company was
incorporated: see Re Jubilee Cotton Mills [1924] A.C. 958.”
In Bharti Gupta Ramola v. CIT [2012] 20 taxmann.com 762, the Delhi
High Court held that the clause [section 2(42A)] refers to the holding
period. It will not be appropriate to exclude or include any day of the
holding for computing the said period. The date on which the asset is
acquired is not to be excluded because the holding starts from the said
date.
In view of the above, the date of allotment or any portion of that day has
to be included in computing the holding period.
It must be noted that ‘rights share’ is a capital asset distinct from ‘rights’
or the right to subscribe. Explanation 1(i)(d) to section 2(42A) applies to
the former. Explanation 1(i)(e) to section 2(42A) [See Para 3.6-6] applies
to the latter.
3.6-6 Computation of the holding period of the right to subscribe to shares/
other security - i.e. ‘rights’
Inthecaseofrighttosubscribetoanyfinancialassetwhichisrenounced
in favour of any other person, the period shall be reckoned from the date
of offer of such right by the company or institution making such offer
for determining whether the right was held for 12 months or less or for
more than 12 months. [Explanation 1(i)(e) to section 2(42A)].
As regards the phrase ‘from the date of offer’, remarks in Para 3.6-5
above as regards ‘from the date of allotment’ shall apply here also.
Para 3.6 TYPES OF CAPITAL ASSETS 76
30. Crucialdateisdateonwhichrighttosubscribecomesintoexistence.For
determiningwhetherthegains/lossofrenunciationofrighttosubscribe
is a short-term or long-term gains/loss, the crucial date is the date on
which such right to subscribe for additional shares/debentures comes
into existence and the date of renunciation [transfer] of such right -
Navin Jindal v. Asstt. CIT [2010] 187 Taxman 283 (SC).
3.6-7 Computation of holding period in case of bonus shares/bonus deben-
tures
In the case of a financial asset allotted without any payment and on the
basis of holding of any other financial asset, the period shall be reckoned
from the date of allotment of such financial asset for determining
whether the right was held for 12 months or less or for more than 12
months. [Explanation 1(i)(f) to section 2(42A)].
Asregardsthephrase‘fromthedateofallotment’[SeePara3.6-5above].
Bonus shares issued by a company are acquired by a shareholder when
they are issued and they must be taken to be held by shareholder from
the date of their issue and not from the date when the original shares, in
respect of which they are issued, were acquired by the shareholder -
Executive of the Will of Late Shri Manecklal Premchand v. CIT [1990] 48
Taxman 310 (Bom.)/Manecklal Premchand v. CIT [1990] 186 ITR 554
(Bom.)/CIT v. D.V. Paranjape [2014] 49 taxmann.com 245/226 Taxman
169 (Bom.).
3.6-8 Computation of holding period of share/shares in an Indian company
which becomes the property of the assessee in consideration of demerger
If a share or shares in an Indian company (resulting company) becomes
property of assessee (who was a shareholder of demerged company) as
consideration for his shares in demerged company, the period for which
sharesindemergedcompanywereheldbytheassesseeshallbeincluded
in determining the holding period of shares in resulting company.
[Explanation 1(i)(g) to section 2(42A)]
3.6-9 Computation of holding period of specified security or sweat equity
shares
In the case of a capital asset, being any specified security or sweat equity
sharesallottedortransferred,directlyorindirectly,bytheemployerfree
of cost or at concessional rate to his employees (including former
employee or employees), the period shall be reckoned from the date of
77 COMPUTE HOLDING PERIOD OF CAPITAL ASSET Para 3.6
31. allotment or transfer of such specified security or sweat equity shares
for determining whether the right was held for 12 months or less or for
more than 12 months. [Explanation 1(i)(hb) to section 2(42A)]
The following definitions may be noted:
u ‘Specified security’ means the securities as defined in clause (h) of
section 2 of the Securities Contracts (Regulation) Act, 1956 [See
Para 3.7-1] and, where employees’ stock option has been granted
under any plan or scheme therefor, includes the securities offered
under such plan or scheme;
u ‘Sweat equity shares’ means equity shares issued by a company to
its employees or directors at a discount or for consideration other
than cash for providing know-how or making available rights in
the nature of intellectual property rights or value additions, by
whatever name called.
Asregardsthephrase‘fromthedateofallotment’[SeePara3.6-5above].
3.6-10 Computation of holding period of unit of business trust allotted
pursuant to transfer of shares
In the case of a capital asset, being a unit of a business trust, allotted
pursuant to transfer of share or shares as referred to in clause (xvii) of
section 47 [see Para 5.29], there shall be included the period for which
the share or shares were held by the assessee. [Explanation 1(i)(hc) to
section 2(42A)].
3.6-11 Computation of holding period of units which become property of the
assessee in consideration of transfer referred to in Section 47(xviii)
In the case of a capital asset, being a unit or units, which becomes the
property of the assessee in consideration of a transfer referred to in
clause (xviii) of section 47 [see Para 5.30], there shall be included the
period for which the unit or units in the consolidating scheme of the
mutual fund were held by the assessee. [Explanation 1(i)(hd) to section
2(42A)].
3.6-12 Computation of holding period of shares acquired by non-resident on
redemption of GDRs
In the case of a capital asset, being share or shares of a company, which
is acquired by the non-resident assessee on redemption of Global
Depository Receipts [See clause (b) of sub-section (1) of section 115AC]
Para 3.6 TYPES OF CAPITAL ASSETS 78
32. held by such assessee, the period shall be reckoned from the date on
which a request for such redemption was made. [Explanation 1(i)(he)
to section 2(42A)].
3.6-13 Computation of holding period of equity shares acquired by way of
conversion of preference shares into equity shares
In the case of a capital asset, being equity shares in a company, which
becomes the property of the assessee in consideration of a transfer
referred to in clause (xb) of section 47, there shall be included the pe-
riod for which the preference shares were held by the assessee; [Expla-
nation 1(i)(hf) to section 2(42A)].
3.6-14 Computation of holding period of unit or units acquired in consideration
of a transfer referred to in clause (xix) of section 47
In the case of a capital asset, being a unit or units, which becomes the
property of the assessee in consideration of a transfer referred to in
clause (xix) of section 47, there shall be included the period for which
the unit or units in the consolidating plan of a mutual fund scheme
were held by the assessee. [Explanation 1(i)(hg) to section 2(42A)].
3.6-15 Holding period in case of unit or units in segregated portfolios
SEBI has vide circular SEBI/HO/IMD/DF2/CIR/P/2018/160 dated
December 28, 2018, permitted creation of segregated portfolio of debt
and money market instruments by Mutual Fund Schemes. As per the
SEBI circular, all the existing unit holders in the affected scheme as on
the day of the credit event shall be allotted equal number of units in the
segregated portfolio as held in the main portfolio. On segregation, the
unit holders come to hold same number of units in two schemes –the
main scheme and segregated scheme.
Inviewoftheabove,theFinanceAct,2020hasinsertedanewclause(hh)
in Explanation 1 to sub-section (42A) of section 2 of the Act 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.
Further, a new sub-section (2AG) has been inserted by the Finance Act,
2020 in section 49 of the Act to provide that the cost of acquisition of a
unit or units in the segregated portfolio shall be the amount which bears
to the cost of acquisition of a unit or units held by the assessee in the total
79 COMPUTE HOLDING PERIOD OF CAPITAL ASSET Para 3.6
33. portfolio, the same proportion as the net asset value of the asset trans-
ferred to the segregated portfolio bears to the net asset value of the total
portfolio immediately before the segregation of portfolios.
Sub-section (2AH) has been inserted in the said section to provide that
the cost of the acquisition of the original units held by the unit holder in
the main portfolio shall be deemed to have been reduced by the amount
as so arrived at under the proposed sub-section (2AG).
The Explanation below these two new sub-sections, as inserted by the
Finance Act, 2020, provide that for the purposes of sub-sections (2AG)
and (2AH), the expressions “main portfolio”, “segregated portfolio” and
“total portfolio” shall have the meaning respectively assigned to them in
the said circular dated 28th December, 2018 issued by SEBI.
These amendments will take effect from 1st April, 2020 and will, accord-
ingly, apply in relation to the assessment year 2020-21 and subsequent
assessment years.
3.6-16 Computation of holding period of a share or debenture which becomes
the property of the assessee in the circumstances mentioned in clause (x) of
section 47
In the case of a capital asset, being a share or debenture of a company,
which becomes the property of the assessee in the circumstances men-
tioned in clause (x) of section 47 [see Para 5.17] of the Act, there shall
be included the period for which the bond, debenture, debenture-stock
or deposit certificate, as the case may be, was held by the assessee prior
to the conversion. [Explanation 1(ii) to section 2(42A); Rule 8AA].
Where assessee was allotted convertible debentures and later on same
were converted into shares, while computing capital gains arising from
sale of said shares, it would be logical to reckon date of acquisition of
convertible debentures as date of acquisition of such shares - CIT v.
Naveen Bhatia [2015] 62 taxmann.com 87/235 Taxman 178 (Punj. &
Har.).
3.6-17 Computation of holding period of a capital asset declared in IDS, 2016
In the case of a capital asset, declared under the Income Declaration
Scheme, 2016,—
u being an immovable property, the period for which such property
is held shall be reckoned from the date on which such property is
acquired if the date of acquisition is evidenced by a deed regis-
tered with any authority of a State Government; and
Para 3.6 TYPES OF CAPITAL ASSETS 80