Income Tax Act, 2025
Section 8: Subs. by Act 21 of 1998, s. 3, for “Deputy Commissioner” (w.e.f. 11998).
8. Subs. by Act 21 of 1998, s. 3, for “Deputy Commissioner” (w.e.f. 11998).
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1[Explanation 4.—Where any asset which had once belonged to the assessee and had been used by
him for the purposes of his business or profession and thereafter ceased to be his property by reason of
transfer or otherwise, is re-acquired by him, the actual cost to the assessee shall be—
(i) the actual cost to him when he first acquired the asset as reduced by—
(a) the amount of depreciation actually allowed to him under this Act or under the
corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of any
previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
(b) the amount of depreciation that would have been allowable to the assessee for any
assessment year commencing on or after the 1st day of April, 1988, as if the asset was the only
asset in the relevant block of assets; or
(ii) the actual price for which the asset is re-acquired by him,
whichever is less.]
2[Explanation 4A.—Where before the date of acquisition by the assessee (hereinafter referred to as
the first mentioned person), the assets were at any time used by any other person (hereinafter referred to
as the second mentioned person) for the purposes of his business or profession and depreciation
allowance has been claimed in respect of such assets in the case of the second mentioned person and such
person acquires on lease, hire or otherwise assets from the first mentioned person, then, notwithstanding
anything contained in Explanation 3, the actual cost of the transferred assets, in the case of first
mentioned person, shall be the same as the written down value of the said assets at the time of transfer
thereof by the second mentioned person.]
Explanation 5.—Where a building previously the property of the assessee is brought into use for the
purpose of the business or profession after the 28th day of February, 1946, the actual cost to the assessee
shall be the actual cost of the building to the assessee, as reduced by an amount equal to the depreciation
calculated at the rate in force on that date that would have been allowable had the building been used for
the aforesaid purposes since the date of its acquisition by the assessee.
3[Explanation 6.—When any capital asset is transferred by a holding company to its subsidiary
company or by a subsidiary company to its holding company, then, if the conditions of clause (iv) or, as
the case may be, of clause (v) of section 47 are satisfied, the actual cost of the transferred capital asset to
the transferee-company shall be taken to be the same as it would have been if the transferor-company had
continued to hold the capital asset for the purposes of its business.]
4[Explanation 7.—Where, in a scheme of amalgamation, any capital asset is transferred by the
amalgamating company to the amalgamated company and the amalgamated company is an Indian
company, the actual cost of the transferred capital asset to the amalgamated company shall be taken to be
the same as it would have been if the amalgamating company had continued to hold the capital asset for
the purposes of its own business.]
the actual cost to him when he first acquired the asset as reduced by—
the amount of depreciation actually allowed to him under this Act or under the
corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of any
previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
the amount of depreciation that would have been allowable to the assessee for any
assessment year commencing on or after the 1st day of April, 1988, as if the asset was the only
asset in the relevant block of assets; or
the actual price for which the asset is re-acquired by him,
whichever is less.]
2[Explanation 4A.—Where before the date of acquisition by the assessee (hereinafter referred to as
the first mentioned person), the assets were at any time used by any other person (hereinafter referred to
as the second mentioned person) for the purposes of his business or profession and depreciation
allowance has been claimed in respect of such assets in the case of the second mentioned person and such
person acquires on lease, hire or otherwise assets from the first mentioned person, then, notwithstanding
anything contained in Explanation 3, the actual cost of the transferred assets, in the case of first
mentioned person, shall be the same as the written down value of the said assets at the time of transfer
thereof by the second mentioned person.]
Explanation 5.—Where a building previously the property of the assessee is brought into use for the
purpose of the business or profession after the 28th day of February, 1946, the actual cost to the assessee
shall be the actual cost of the building to the assessee, as reduced by an amount equal to the depreciation
calculated at the rate in force on that date that would have been allowable had the building been used for
the aforesaid purposes since the date of its acquisition by the assessee.
3[Explanation 6.—When any capital asset is transferred by a holding company to its subsidiary
company or by a subsidiary company to its holding company, then, if the conditions of clause
or, as
the case may be, of clause
of section 47 are satisfied, the actual cost of the transferred capital asset to
the transferee-company shall be taken to be the same as it would have been if the transferor-company had
continued to hold the capital asset for the purposes of its business.]
4[Explanation 7.—Where, in a scheme of amalgamation, any capital asset is transferred by the
amalgamating company to the amalgamated company and the amalgamated company is an Indian
company, the actual cost of the transferred capital asset to the amalgamated company shall be taken to be
the same as it would have been if the amalgamating company had continued to hold the capital asset for
the purposes of its own business.]