Quick Summary
Amendment of Section 47 Section 47 of the Act provides exclusion to certain transactions not regarded as transfer for the purposes of chargeability under 'Capital Gains' under section 45. 2. Clause (iii) of section 47 provides that nothing contained in section 45 shall apply to any transfer of a capital asset under a gift or will or an irrevocable trust. The first proviso to the said clause makes an exception to the clause in respect of specified ESOPs. 3. With the insertion of section 50D
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FAQ :
Section 47 of the Act outlines certain transactions that are not considered 'transfers' for the purpose of Capital Gains tax.
Previously, transfers of capital assets under a gift, will, or irrevocable trust by an individual or Hindu Undivided Family were generally not subject to Capital Gains Tax under Section 47(iii).
The amendment is being made to bolster anti-avoidance provisions and eliminate the avoidance of Capital Gains tax, which has been a litigated issue and led to tax avoidance and erosion of the Indian tax base.
The amendment will affect individuals and Hindu Undivided Families (HUFs) who transfer capital assets by way of gift, will, or irrevocable trust.
The amendment will be effective from 1st April 2025, applying to assessment year 2025-26 and subsequent assessment years.
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