Income Tax Act, 2025
Section 10: Subs. by Act 21 of 1998, s. 21 for “31st day of December, 1997” (w.e.f. 11998).
10. Subs. by Act 21 of 1998, s. 21 for “31st day of December, 1997” (w.e.f. 11998).
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Provided that such transfer is made during the period commencing from the previous year in
which the said company has become a sick industrial company under sub-section (1) of section 17 of
that Act and ending with the previous year during which the entire net worth of such company
becomes equal to or exceeds the accumulated losses.
Explanation.—For the purposes of this clause, “net worth” shall have the meaning assigned to it
in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions)
Act, 1985 (1 of 1986);]
1[(xiii) 2[any transfer of a capital asset or intangible asset by a firm to a company as a result of
succession of the firm by a company in the business carried on by the firm, or any transfer of a capital
asset to a company in the course of 3[demutualisation or corporatisation] of a recognised stock
exchange in India as a result of which an association of persons or body of individuals is succeeded
by such company:]
Provided that—
(a) all the assets and liabilities of the firm or of the association of persons or body of
individuals relating to the business immediately before the succession become the assets and
liabilities of the company;
(b) all the partners of the firm immediately before the succession become the shareholders of
the company in the same proportion in which their capital accounts stood in the books of the firm
on the date of the succession;
(c) the partners of the firm do not receive any consideration or benefit, directly or indirectly,
in any form or manner, other than by way of allotment of shares in the company; and
(d) the aggregate of the shareholding in the company of the partners of the firm is not less
than fifty per cent of the total voting power in the company and their shareholding continues to be
as such for a period of five years from the date of the succession;
4[(e) the 3[demutualisation or corporatisation] of a recognised stock exchange in India is
carried out in accordance with a scheme for 3[demutualisation or corporatisation] which is
approved by the Securities and Exchange Board of India established under section 3 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992);]
5[(xiiia) any transfer of a capital asset being a membership right held by a member of a
recognised stock exchange in India for acquisition of shares and trading or clearing rights acquired by
such member in that recognised stock exchange in accordance with a scheme for demutualisation or
corporatisation which is approved by the Securities and Exchange Board of India established under
section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
6[(xiiib) any transfer of a capital asset or intangible asset by a private company or unlisted public
company (hereafter in this clause referred to as the company) to a limited liability partnership or any
transfer of a share or shares held in the company by a shareholder as a result of conversion of the
company into a limited liability partnership in accordance with the provisions of section 56 or
section 57 of the Limited Liability Partnership Act, 2008 (6 of 2009):
of section 17 of
that Act and ending with the previous year during which the entire net worth of such company
becomes equal to or exceeds the accumulated losses.
Explanation.—For the purposes of this clause, “net worth” shall have the meaning assigned to it
in clause
of sub-section
of section 3 of the Sick Industrial Companies (Special Provisions)
Act, 1985 (1 of 1986);]
1[
2[any transfer of a capital asset or intangible asset by a firm to a company as a result of
succession of the firm by a company in the business carried on by the firm, or any transfer of a capital
asset to a company in the course of 3[demutualisation or corporatisation] of a recognised stock
exchange in India as a result of which an association of persons or body of individuals is succeeded
by such company:]
Provided that—
all the assets and liabilities of the firm or of the association of persons or body of
individuals relating to the business immediately before the succession become the assets and
liabilities of the company;
all the partners of the firm immediately before the succession become the shareholders of
the company in the same proportion in which their capital accounts stood in the books of the firm
on the date of the succession;
the partners of the firm do not receive any consideration or benefit, directly or indirectly,
in any form or manner, other than by way of allotment of shares in the company; and
the aggregate of the shareholding in the company of the partners of the firm is not less
than fifty per cent of the total voting power in the company and their shareholding continues to be
as such for a period of five years from the date of the succession;
4[
the 3[demutualisation or corporatisation] of a recognised stock exchange in India is
carried out in accordance with a scheme for 3[demutualisation or corporatisation] which is
approved by the Securities and Exchange Board of India established under section 3 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992);]
5[
any transfer of a capital asset being a membership right held by a member of a
recognised stock exchange in India for acquisition of shares and trading or clearing rights acquired by
such member in that recognised stock exchange in accordance with a scheme for demutualisation or
corporatisation which is approved by the Securities and Exchange Board of India established under
section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
6[
any transfer of a capital asset or intangible asset by a private company or unlisted public
company (hereafter in this clause referred to as the company) to a limited liability partnership or any
transfer of a share or shares held in the company by a shareholder as a result of conversion of the
company into a limited liability partnership in accordance with the provisions of section 56 or
section 57 of the Limited Liability Partnership Act, 2008 (6 of 2009):