Income Tax Act, 2025
Section 1: Ins. by Act 23 of 2012, s. 19 (w.e.f. 12013).
1. Ins. by Act 23 of 2012, s. 19 (w.e.f. 12013).
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(4) If the equity shares of the company or the new asset acquired by the company are sold or
otherwise transferred within a period of five years from the date of their acquisition, the amount of capital
gain arising from the transfer of the residential property not charged under section 45 as provided in
sub-section (1) shall be deemed to be the income of the assessee chargeable under the head “Capital
gains” of the previous year in which such equity shares or such new asset are sold or otherwise
transferred, in addition to taxability of gains, arising on account of transfer of shares or of the new asset,
in the hands of the assessee or the company, as the case may be.
(5) The provisions of this section shall not apply to any transfer of residential property made after the
31st day of March, 2017.
1[Provided that in case of an investment in eligible start-up, the provisions of this sub-section shall
have the effect as if for the figures, letters and words “31st day of March, 2017”, the figures, letters and
words “31st day of March, 2019” had been substituted.]
(6) For the purposes of this section,—
(a) “eligible assessee” means an individual or a Hindu undivided family;
(b) “eligible company” means a company which fulfils the following conditions, namely:—
(i) it is a company incorporated in India during the period from the 1st day of April of the
previous year relevant to the assessment year in which the capital gain arises to the due date of
furnishing of return of income under sub-section (1) of section 139 by the assessee;
(ii) it is engaged in the business of manufacture of an article or a thing 1[or in an eligible
business;]
(iii) it is a company in which the assessee has more than fifty per cent. share capital or more
than fifty per cent. voting rights after the subscription in shares by the assessee; and
(iv) it is a company which qualifies to be a small or medium enterprise under the Micro,
Small and Medium Enterprises Act, 2006 (27 of 2006) 1[or is an eligible start-up];
1[(ba) “eligible start-up” and “eligible business” shall have the meanings respectively assigned to
them in Explanation below sub-section (4) of section 80-IAC;]
(c) “net consideration” shall have the meaning assigned to it in the Explanation to section 54F;
(d) “new asset” means new plant and machinery but does not include—
(i) any machinery or plant which, before its installation by the assessee, was used either
within or outside India by any other person;
(ii) any machinery or plant installed in any office premises or any residential accommodation,
including accommodation in the nature of a guest-house;
(iii) any office appliances including computers or computer software;
(iv) any vehicle; or
(v) any machinery or plant, the whole of the actual cost of which is allowed as a deduction
(whether by way of depreciation or otherwise) in computing the income chargeable under the
head “Profits and gains of business or profession” of any previous year.]
If the equity shares of the company or the new asset acquired by the company are sold or
otherwise transferred within a period of five years from the date of their acquisition, the amount of capital
gain arising from the transfer of the residential property not charged under section 45 as provided in
sub-section
shall be deemed to be the income of the assessee chargeable under the head “Capital
gains” of the previous year in which such equity shares or such new asset are sold or otherwise
transferred, in addition to taxability of gains, arising on account of transfer of shares or of the new asset,
in the hands of the assessee or the company, as the case may be.
The provisions of this section shall not apply to any transfer of residential property made after the
31st day of March, 2017.
1[Provided that in case of an investment in eligible start-up, the provisions of this sub-section shall
have the effect as if for the figures, letters and words “31st day of March, 2017”, the figures, letters and
words “31st day of March, 2019” had been substituted.]
For the purposes of this section,—
“eligible assessee” means an individual or a Hindu undivided family;
“eligible company” means a company which fulfils the following conditions, namely:—
it is a company incorporated in India during the period from the 1st day of April of the
previous year relevant to the assessment year in which the capital gain arises to the due date of
furnishing of return of income under sub-section
of section 139 by the assessee;
it is engaged in the business of manufacture of an article or a thing 1[or in an eligible
business;]
it is a company in which the assessee has more than fifty per cent. share capital or more
than fifty per cent. voting rights after the subscription in shares by the assessee; and
it is a company which qualifies to be a small or medium enterprise under the Micro,
Small and Medium Enterprises Act, 2006 (27 of 2006) 1[or is an eligible start-up];
1[
“eligible start-up” and “eligible business” shall have the meanings respectively assigned to
them in Explanation below sub-section
of section 80-IAC;]
“net consideration” shall have the meaning assigned to it in the Explanation to section 54F;
“new asset” means new plant and machinery but does not include—
any machinery or plant which, before its installation by the assessee, was used either
within or outside India by any other person;
any machinery or plant installed in any office premises or any residential accommodation,
including accommodation in the nature of a guest-house;
any office appliances including computers or computer software;
any vehicle; or
any machinery or plant, the whole of the actual cost of which is allowed as a deduction
(whether by way of depreciation or otherwise) in computing the income chargeable under the
head “Profits and gains of business or profession” of any previous year.]