The provisions govern taxation of capital assets or ...

Capital Asset Transfers During Entity Dissolution Now Taxable at Fair Market Value Under Sec 9B & Cl 8

February 26, 2025

Notes Bill

The provisions govern taxation of capital assets or stock-in-trade transfers during entity dissolution or reconstitution. Under both Sec 9B of IT Act 1961 and Cl 8 of IT Bill 2025, such transfers are deemed taxable events with fair market value as consideration. Cl 8 introduces refinements including a two-year limitation for guidelines issuance, 30-day parliamentary review, and modified terminology from "previous year" to "tax year." The framework requires specified entities to recognize deemed transfers in distribution year, compute gains on FMV basis, and subjects proceeds to business income or capital gains tax. Specified persons must document received assets and consider FMV implications. While core principles remain unchanged, Cl 8 enhances administrative procedures and oversight mechanisms for implementation effectiveness.

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The provisions govern taxation of capital assets or ...

Capital Asset Transfers During Entity Dissolution Now Taxable at Fair Market Value Under Sec 9B & Cl 8

February 26, 2025

Notes Bill

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