Income Tax Act, 2025
Section 4: Ins. by Act 20 of 1967, s. 16 (w.e.f. 11967).
4. Ins. by Act 20 of 1967, s. 16 (w.e.f. 11967).
234
1[Explanation 7A.—Where, in a demerger, any capital asset is transferred by the demerged company
to the resulting company and the resulting company is an Indian company, the actual cost of the
transferred capital asset to the resulting company shall be taken to be the same as it would have been if
the demerged company had continued to hold the capital asset for the purpose of its own business:
Provided that such actual cost shall not exceed the written down value of such capital asset in the
hands of the demerged company.]
2[Explanation 8.—For the removal of doubts, it is hereby declared that where any amount is paid or is
payable as interest in connection with the acquisition of an asset, so much of such amount as is relatable
to any period after such asset is first put to use shall not be included, and shall be deemed never to have
been included, in the actual cost of such asset.]
3[Explanation 9.—For the removal of doubts, it is hereby declared that where an asset is or has been
acquired on or after the 1st day of March, 1994 by an assessee, the actual cost of asset shall be reduced by
the amount of duty of excise or the additional duty leviable under section 3 of the Customs Tariff Act,
1975 (51 of 1975) in respect of which a claim of credit has been made and allowed under the Central
Excise Rules, 1944.]
4[Explanation 10.—Where a portion of the cost of an asset acquired by the assessee has been met
directly or indirectly by the Central Government or a State Government or any authority established under
any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name
called), then, so much of the cost as is relatable to such subsidy or grant or reimbursement shall not be
included in the actual cost of the asset to the assessee:
Provided that where such subsidy or grant or reimbursement is of such nature that it cannot be
directly relatable to the asset acquired, so much of the amount which bears to the total subsidy or
reimbursement or grant the same proportion as such asset bears to all the assets in respect of or with
reference to which the subsidy or grant or reimbursement is so received, shall not be included in the
actual cost of the asset to the assessee.]
1[Explanation 11.—Where an asset which was acquired outside India by an assessee, being a nonresident, is brought by him to India and used for the purposes of his business or profession, the actual cost
of the asset to the assessee shall be the actual cost to the assessee, as reduced by an amount equal to the
amount of depreciation calculated at the rate in force that would have been allowable had the asset been
used in India for the said purposes since the date of its acquisition by the assessee.]
5[Explanation 12.—Where any capital asset is acquired by the assessee under a scheme for
corporatisation of a recognised stock exchange in India, 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), the actual cost of the asset shall be deemed to be the amount which would have been regarded as
actual cost had there been no such corporatization.]