Section 50AA - Special provision for computation of capital gains in case of Market Linked Debenture - Income Tax - Ready Reckoner - Income Tax

Special provision for computation of capital gains in case of Market Linked Debenture - Section 50AA [Inserted by FA, 2023 w.e.f. 01st April 2024] On or After 23.07.2024 [ Substituted vide Finance (No. 2) Act, 2024 ] Capital Asset for the purpose of Section 50AA where the capital asset (a) is a unit of a Specified Mutual Fund acquired on or after the 1st day of April, 2023 or a Market Linked Debenture; or (b) is an unlisted bond or an unlisted debenture which is transferred or redeemed or matures on or after the 23rd day of July, 2024, Computation of Capital Gain The full value of consideration received or accruing as a result of the transfer or redemption or maturity of such debenture or unit or bond as reduced by (i) the cost of acquisition of the debenture or unit or bond; and (ii) the expenditure incurred wholly and exclusively in connection with such transfer or redemption or maturity, Deemed to be LTCG or STCG Such gains shall be deemed to be the capital gains arising from the transfer of a short-term capital asset. Deduction No deduction shall be allowed in computing the income chargeable under the head Capital gains in respect of any sum paid on account of STT. Before 23.07.2024 - Where the capital asset is a unit of a Specified Mutual Fund acquired on or after the 1st day of April, 2023 or a Market Linked Debenture, Computation of Capital Gain the full value of consideration received or accruing as a result of the transfer or redemption or maturity of such debenture or unit as reduced by (i) the cost of acquisition of the debenture or unit; and (ii) the expenditure incurred wholly and exclusively in connection with such transfer or redemption or maturity, Deemed to be LTCG/ STCG Such gains shall be deemed to be the capital gains arising from the transfer of a short-term capital asset. Deduction No deduction shall be allowed in computing the income chargeable under the head Capital gains in respect of any sum paid on account of STT. Explanation. For the purposes of this section (i) Market Linked Debenture means a security by whatever name called, which has an underlying principal component in the form of a debt security and where the returns are linked to market returns on other underlying securities or indices and include any security classified or regulated as a Market Linked Debenture by the Securities and Exchange Board of India; (ii) Upto 31.03.2026 - Specified Mutual Fund means a Mutual Fund by whatever name called, where not more than 35% of its total proceeds is invested in the equity shares of domestic companies: Provided that percentage of equity shareholding held in respect of the Specified Mutual Fund shall be computed with reference to the annual average of the daily closing figures. (iii) From 01.04.2026 - Specified Mutual Fund means, (a) a Mutual Fund by whatever name called, which invests more than sixty-five per cent. of its total proceeds in debt and money market instruments; or (b) a fund which invests sixty-five per cent. or more of its total proceeds in units of a fund referred to in sub-clause (a): The percentage of investment in debt and money market instruments or in units of a fund, as the case may be, in respect of the Specified Mutual Fund, shall be computed with reference to the annual average of the daily closing figures: For the purposes of this clause, debt and money market instruments shall include any securities, by whatever name called, classified or regulated as debt and money market instruments by the Securities and Exchange Board of India. . [ substituted Vide Finance (No.2 ) Act, 2024 ]