Clause 46 - Financial year of taxability - Direct Taxes Code Bill, 2009

Financial year of taxability 46. (1) The income from the transfer of an investment asset specified in column 2 of the Table 2 shall be the income of the financial year specified in column 3 of the said Table: Table-2 Financial year of taxability Sl. No. Nature of transfer Financial year (1) (2) (3) a. Transfer between parent and subsidiary company, referred to in clause (c) or clause (d) of sub-section (1) of section 45 (a) in a case where the investment asset is converted by the transferee into, or is treated by it as, business trading asset, the financial year in which the business trading asset is sold; (b) in the case of any other investment asset, the financial year in which the parent company, or its nominee, ceases to hold the whole of the share capital of the subsidiary company b. Transfer in a scheme under a business reorganisation, referred to in clause (e) of sub-section (1) of section 45 is not complied with. The financial year in which any of the conditions referred to in clause (16) or clause 81, as the case may be, of section 284 c. Transfer by way of compulsory acquisition under any law The financial year in which the compensation or its part, as determined by the Central or State Government or the Reserve bank of India, is received. d. Transfer referred by way of conversion into, or its treatment as business trading asset The financial year in which the converted or treated asset is sold or otherwise transferred. e. Transfer by way of - The financial year in which the asset is transferred or distributed. (i) contribution of the asset, whether by way of capital or otherwise, to a company or an unincorporated body, in which the transferor is, or becomes, a shareholder or participant, as the case may be; or (ii) the distribution of the asset on account of dissolution of an unincorporated body. f. Transfer by way of part performance of a contract, referred to in sub-clause(i) of clause (287) of section 284 The financial year in which the possession of the immovable property is taken or retained. g. Transfer by way of damage or destruction referred to in sub-clause (m) of clause (287) of section 284 The financial year in which the money or asset is received. h. Transfer by way of distribution of the asset to a participant in an unincorporated body on account of his retirement from the body. The financial year in which the money or the asset is distributed. i. Transfer by any mode other than the modes referred to in serial numbers a to h. The financial year in which the transfer took place. (2) The amount referred to in clause (c) of sub-section (2) of section 44 shall, regardless of anything to the contrary contained in sub-section (1), be the income of the financial year in which the capital gains bond is transferred. (3) The amounts referred to in clause (d) and clause (e) of sub-section (2) of section 44 shall, regardless of anything to the contrary contained in sub-section (1), be the income of the financial year in which the amount is withdrawn or of the fourth financial year immediately following the financial year in which the transfer of the original asset is effected, respectively.