Income Tax Act, 2025
Section 12: Ins. by Act 22 of 1996, s. 30 and the Schedule (w.e.f. 201995).
12. Ins. by Act 22 of 1996, s. 30 and the Schedule (w.e.f. 201995).
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income of the depository who is deemed to be the registered owner of securities by virtue of
sub-section (1) of section 10 of the Depositories Act, 1996, and for the purposes of—
(i) section 48; and
(ii) proviso to clause (42A) of section 2,
the cost of acquisition and the period of holding of any securities shall be determined on the basis of the
first-in-first-out method.
Explanation.—For the purposes of this sub-section, the expressions “beneficial owner”, “depository”
and “security” shall have the meanings respectively assigned to them in clauses (a), (e) and (l) of
sub-section (1) of section 2 of the Depositories Act, 1996.]
1[(3) The profits or gains arising from the transfer of a capital asset by a person to a firm or other
association of persons or body of individuals (not being a company or a co-operative society) in which he
is or becomes a partner or member, by way of capital contribution or otherwise, shall be chargeable to tax
as his income of the previous year in which such transfer takes place and, for the purposes of section 48,
the amount recorded in the books of account of the firm, association or body as the value of the capital
asset shall be deemed to be the full value of the consideration received or accruing as a result of the
transfer of the capital asset.
(4) The profits or gains arising from the transfer of a capital asset by way of distribution of capital
assets on the dissolution of a firm or other association of persons or body of individuals (not being a
company or a co-operative society) or otherwise, shall be chargeable to tax as the income of the firm,
association or body, of the previous year in which the said transfer takes place and, for the purposes of
section 48, the fair market value of the asset on the date of such transfer shall be deemed to be the full
value of the consideration received or accruing as a result of the transfer.]
(5) Notwithstanding anything contained in sub-section (1), where the capital gain arises from the
transfer of a capital asset, being a transfer by way of compulsory acquisition under any law, or a transfer
the consideration for which was determined or approved by the Central Government or the Reserve Bank
of India, and the compensation or the consideration for such transfer is enhanced or further enhanced by
any court, Tribunal or other authority, the capital gain shall be dealt with in the following manner,
namely:—
(a) the capital gain computed with reference to the compensation awarded in the first instance or,
as the case may be, the consideration determined or approved in the first instance by the Central
Government or the Reserve Bank of India shall be chargeable as 2[income under the head “Capital
gains” of the previous year in which such compensation or part thereof, or such consideration or part
thereof, was first received]; and
(b) the amount by which the compensation or consideration is enhanced or further enhanced by
the court, Tribunal or other authority shall be deemed to be income chargeable under the head
“Capital gains” of the previous year in which such amount is received by the assessee:
3[Provided that any amount of compensation received in pursuance of an interim order of a court,
Tribunal or other authority shall be deemed to be income chargeable under the head “Capital gains”
of the previous year in which the final order of such court, Tribunal or other authority is made;]
of section 10 of the Depositories Act, 1996, and for the purposes of—
section 48; and
proviso to clause
of section 2,
the cost of acquisition and the period of holding of any securities shall be determined on the basis of the
first-in-first-out method.
Explanation.—For the purposes of this sub-section, the expressions “beneficial owner”, “depository”
and “security” shall have the meanings respectively assigned to them in clauses
and
of
sub-section
of section 2 of the Depositories Act, 1996.]
1[
The profits or gains arising from the transfer of a capital asset by a person to a firm or other
association of persons or body of individuals (not being a company or a co-operative society) in which he
is or becomes a partner or member, by way of capital contribution or otherwise, shall be chargeable to tax
as his income of the previous year in which such transfer takes place and, for the purposes of section 48,
the amount recorded in the books of account of the firm, association or body as the value of the capital
asset shall be deemed to be the full value of the consideration received or accruing as a result of the
transfer of the capital asset.
The profits or gains arising from the transfer of a capital asset by way of distribution of capital
assets on the dissolution of a firm or other association of persons or body of individuals (not being a
company or a co-operative society) or otherwise, shall be chargeable to tax as the income of the firm,
association or body, of the previous year in which the said transfer takes place and, for the purposes of
section 48, the fair market value of the asset on the date of such transfer shall be deemed to be the full
value of the consideration received or accruing as a result of the transfer.]
Notwithstanding anything contained in sub-section
the capital gain computed with reference to the compensation awarded in the first instance or,
as the case may be, the consideration determined or approved in the first instance by the Central
Government or the Reserve Bank of India shall be chargeable as 2[income under the head “Capital
gains” of the previous year in which such compensation or part thereof, or such consideration or part
thereof, was first received]; and
the amount by which the compensation or consideration is enhanced or further enhanced by
the court, Tribunal or other authority shall be deemed to be income chargeable under the head
“Capital gains” of the previous year in which such amount is received by the assessee:
3[Provided that any amount of compensation received in pursuance of an interim order of a court,
Tribunal or other authority shall be deemed to be income chargeable under the head “Capital gains”
of the previous year in which the final order of such court, Tribunal or other authority is made;]