Section 22 - Amendment of section 55 - Finance Act, 2018

Amendment of section 55 22 . In section 55 of the Income-tax Act, in sub-section (2), after clause (ab), the following clause shall be inserted, namely:- '(ac) subject to the provisions of sub-clauses (i) and (ii) of clause (b), in relation to a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust referred to in section 112A, acquired before the 1st day of February, 2018, shall be higher of- (i) the cost of acquisition of such asset; and (ii) lower of- (A) the fair market value of such asset; and (B) the full value of consideration received or accruing as a result of the transfer of the capital asset. Explanation.-For the purposes of this clause,- (a) fair market value means,- (i) in a case where the capital asset is listed on any recognised stock exchange as on the 31st day of January, 2018, the highest price of the capital asset quoted on such exchange on the said date: Provided that where there is no trading in such asset on such exchange on the 31st day of January, 2018, the highest price of such asset on such exchange on a date immediately preceding the 31st day of January, 2018 when such asset was traded on such exchange shall be the fair market value; (ii) in a case where the capital asset is a unit which is not listed on a recognised stock exchange as on the 31st day of January, 2018, the net asset value of such unit as on the said date; (iii) in a case where the capital asset is an equity share in a company which is- (A) not listed on a recognised stock exchange as on the 31st day of January, 2018 but listed on such exchange on the date of transfer; (B) listed on a recognised stock exchange on the date of transfer and which became the property of the assessee in consideration of share which is not listed on such exchange as on the 31st day of January, 2018 by way of transaction not regarded as transfer under section 47, an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the financial year 2017-2018 bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the first day of April, 2001, whichever is later; (b) Cost Inflation Index shall have the meaning assigned to it in clause (v) of the Explanation to section 48; (c) recognised stock exchange shall have the meaning assigned to it in clause (ii) of Explanation 1 to clause (5) of section 43. .