RATIONALISATION OF SECTION 56

RATIONALISATION OF SECTION 56

The current provisions of Section 56 (2) (vii) provides for taxation of shares of company received by individual or HUF, as a consequence of demerger or amalgamation of company, in excess of Rs. 50,000. However, the taxation provision does not apply if the recipient is firm or company.

Thus, to ensure parity in tax treatment, it is proposed that any shares of company received by individual or HUF, as a consequence of demerger or amalgamation of company, shall not be liable for taxation as per Section 56 (2) (vii).

This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent assessment years

No Comments

Leave Comment

Please enter a message.
Please enter your name.
Please enter a valid e-mail address.