Income Tax Act, 2025
Section 9: Ins. by Act 32 of 1971, s. 5 (w.r.e.f. 11962).
9. Ins. by Act 32 of 1971, s. 5 (w.r.e.f. 11962).
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(ii) where only a part of the net consideration is utilised for acquiring the new capital asset, so
much of such capital gain as is equal to the amount, if any, by which the amount so utilised
exceeds the cost of the transferred asset;
(b) where a capital asset, being property held under trust in part only for such purposes, is
transferred and the whole or any part of the net consideration is utilised for acquiring another capital
asset to be so held, then, the appropriate fraction of the capital gain arising from the transfer shall be
deemed to have been applied to charitable or religious purposes to the extent specified hereunder,
namely:—
(i) where the whole of the net consideration is utilised in acquiring the new capital asset, the
whole of the appropriate fraction of such capital gain;
(ii) in any other case, so much of the appropriate fraction of the capital gain as is equal to the
amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new
asset exceeds the appropriate fraction of the cost of the transferred asset.
Explanation.—In this sub-section,—
(i) “appropriate fraction” means the fraction which represents the extent to which the income
derived from the capital asset transferred was immediately before such transfer applicable to
charitable or religious purposes;
(ii) “cost of the transferred asset” means the aggregate of the cost of acquisition (as
ascertained for the purposes of section 48 and 49) of the capital asset which is the subject of the
transfer and the cost of any improvement thereto within the meaning assigned to that expression
in sub-clause (b) of clause (1) of section 55;
(iii) “net consideration” means the full value of the consideration received or accruing as a
result of the transfer of the capital asset as reduced by any expenditure incurred wholly and
exclusively in connection with such transfer.]
1[(1B) Where any income in respect of which an option is exercised under clause (2) of
the Explanation to sub-section (1) is not applied to charitable or religious purposes in India during the
period referred to in sub-clause (a) or, as the case may be, sub-clause (b), of the said clause, then, such
income shall be deemed to be the income of the person in receipt thereof—
(a) in the case referred to in sub-clause (i) of the said clause, of the previous year immediately
following the previous year in which the income was received; or
(b) in the case referred to in sub-clause (ii) of the said clause, of the previous year immediately
following the previous year in which the income was derived.
2[(2) 3[Where 4[eighty-five per cent.] of the income referred to in clause (a) or clause (b) of
sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been
applied, to charitable or religious purposes in India during the previous year but is accumulated or set
apart, either in whole or in part, for application to such purposes in India, such income so accumulated or
set apart shall not be included in the total income of the previous year of the person in receipt of the
income, provided the following conditions are complied with, namely:—]
5[(a) such person furnishes a statement in the prescribed form and in the prescribed3 manner to
the Assessing Officer, stating the purpose for which the income is being accumulated or set apart and
where only a part of the net consideration is utilised for acquiring the new capital asset, so
much of such capital gain as is equal to the amount, if any, by which the amount so utilised
exceeds the cost of the transferred asset;
where a capital asset, being property held under trust in part only for such purposes, is
transferred and the whole or any part of the net consideration is utilised for acquiring another capital
asset to be so held, then, the appropriate fraction of the capital gain arising from the transfer shall be
deemed to have been applied to charitable or religious purposes to the extent specified hereunder,
namely:—
where the whole of the net consideration is utilised in acquiring the new capital asset, the
whole of the appropriate fraction of such capital gain;
in any other case, so much of the appropriate fraction of the capital gain as is equal to the
amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new
asset exceeds the appropriate fraction of the cost of the transferred asset.
Explanation.—In this sub-section,—
“appropriate fraction” means the fraction which represents the extent to which the income
derived from the capital asset transferred was immediately before such transfer applicable to
charitable or religious purposes;
“cost of the transferred asset” means the aggregate of the cost of acquisition (as
ascertained for the purposes of section 48 and 49) of the capital asset which is the subject of the
transfer and the cost of any improvement thereto within the meaning assigned to that expression
in sub-clause
of clause
of section 55;
“net consideration” means the full value of the consideration received or accruing as a
result of the transfer of the capital asset as reduced by any expenditure incurred wholly and
exclusively in connection with such transfer.]
1[
Where any income in respect of which an option is exercised under clause
of
the Explanation to sub-section
is not applied to charitable or religious purposes in India during the
period referred to in sub-clause
or, as the case may be, sub-clause
in the case referred to in sub-clause
of the said clause, of the previous year immediately
following the previous year in which the income was received; or
in the case referred to in sub-clause
of the said clause, of the previous year immediately
following the previous year in which the income was derived.
2[
3[Where 4[eighty-five per cent.] of the income referred to in clause
or clause
of
sub-section
read with the Explanation to that sub-section is not applied, or is not deemed to have been
applied, to charitable or religious purposes in India during the previous year but is accumulated or set
apart, either in whole or in part, for application to such purposes in India, such income so accumulated or
set apart shall not be included in the total income of the previous year of the person in receipt of the
income, provided the following conditions are complied with, namely:—]
5[
such person furnishes a statement in the prescribed form and in the prescribed3 manner to
the Assessing Officer, stating the purpose for which the income is being accumulated or set apart and