India - Income Tax Act 2010 - Saarc

1.303 CH. IV - COMPUTATION OF INCOME FROM CAPITAL GAINS S. 4554[(2A) 55 Where any person has had at any time during previous year anybeneficial interest in any securities, then, any profits or gains arising fromtransfer made by the depository or participant of such beneficial interest inrespect of securities shall be chargeable to income-tax as the income of thebeneficial owner of the previous year in which such transfer took place and shallnot be regarded as income of the depository who is deemed to be the registeredowner of securities by virtue of sub-section (1) of section 10 of the DepositoriesAct, 1996, and for the purposes of—(i) section 48; and(ii) proviso to clause (42A) of section 2,the cost of acquisition and the period of holding of any securities shall bedetermined on the basis of the first-in-first-out method.Explanation.—For the purposes of this sub-section, the expressions “beneficialowner” 56 , “depository” 56 and “security” 56 shall have the meanings respectivelyassigned to them in clauses (a), (e) and (l) of sub-section (1) of section 2 of theDepositories Act, 1996.]57[(3) The profits or gains arising from the transfer of a capital asset by a personto a firm or other association of persons or body of individuals (not being acompany or a co-operative society) in which he is or becomes a partner ormember, by way of capital contribution or otherwise, shall be chargeable to taxas his income of the previous year in which such transfer takes place and, for thepurposes of section 48, the amount recorded in the books of account of the firm,association or body as the value of the capital asset shall be deemed to be the fullvalue of the consideration received or accruing as a result of the transfer of thecapital asset.(4) The profits or gains arising from the transfer of a capital asset by way ofdistribution of capital assets on the dissolution of a firm or other association ofpersons or body of individuals (not being a company or a co-operative society)or otherwise 58 , shall be chargeable to tax as the income of the firm, associationor body, of the previous year in which the said transfer takes place and, for thepurposes of section 48, the fair market value of the asset on the date of suchtransfer shall be deemed to be the full value of the consideration received oraccruing as a result of the transfer.]59[(5) Notwithstanding anything contained in sub-section (1), where the capitalgain arises from the transfer of a capital asset, being a transfer by way ofcompulsory acquisition under any law, or a transfer the consideration for which54. Inserted by the Depositories Act, 1996, w.r.e.f. 20-9-1995.55. See Circular No. 768, dated 24-6-1998 for ‘determination of date of transfer and periodof holding securities held in dematerialized form’.56. For definitions of “beneficial owner”, “depository” and “security” under clauses (a), (e) and(l), respectively, of section 2(1) of the Depositories Act, 1996, see Appendix.57. Inserted by the Finance Act, 1987, w.e.f. 1-4-1988. Original sub-sections (3) and (4) wereinserted by the Finance Act, 1964, w.e.f. 1-4-1964 and later on omitted by the Finance Act,1966, w.e.f. 1-4-1966.58. For the meaning of the term “otherwise”, see Taxmann’s Direct Taxes Manual, Vol. 3.59. Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.