Withdrawal of Exemption in Certain Cases: Clause 71 of the Income Tax Bill, 2025 vs. Section 47A of the Income-tax Act, 1961

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..... e Income-tax Act, 1961, both address the withdrawal of exemptions in specific cases where capital gains are involved. These provisions are crucial in defining the tax implications when certain conditions are not met after a transfer of capital assets. This article provides a detailed analysis of Clause 71, compares it with Section 47A, and discusses the potential implications for stakeholders. Ob .....

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..... er. 2. Subsection (2): This addresses situations where conditions in Section (Clause) 70(zd) or (zf) are not met. The capital gains not charged u/s (clause)  67 become taxable for the successor company in the year of non-compliance. 3. Subsection (3): Similar to Subsection (2), this applies to conditions in Section (Clause) 70(ze). If unmet, the capital gains become taxable for the success .....

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..... compliance with the conditions of asset transfers to avoid unexpected tax liabilities. Companies must monitor their corporate structures and asset treatment to ensure ongoing eligibility for exemptions. Non-compliance could lead to significant tax liabilities, affecting financial planning and reporting. Comparative Analysis Both Clause 71 and Section 47A serve similar purposes but differ in spec .....

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