Quick Summary
Provisions pertaining to bonus stripping and dividend stripping to be made applicable to securities and units 1. Section 94 of the Act contains anti-avoidance provisions to deal with transactions in securities and units of mutual fund which, inter-alia, include dividend stripping and bonus stripping. 2. However, the current provisions of sub-section (8) of section 94 of the Act do not apply to bonus stripping undertaken in case of securities. It is also not applicable to units of Infrastru
Daily Limit Reached
You have reached your daily limit of 2 Free News
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Community
- Daily E-Newsletter
- Unlimited News Access
- Profile Visitors
- Link Social Profiles
- Featured Job Posts
- Pro Badge
- Expert GST Guidance
- Unlimited Forum Replies
- Download Content in PDF
1 Year PLAN
1999
(Excl. of GST ₹359)
2 Years PLAN
3499
(Excl. of GST ₹629)
BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)
View all CCI PRO benefits
Already a PRO member? Login here for an ad-free experience. 07941056694
FAQ :
Bonus stripping is a tax avoidance strategy where an investor buys units of a fund, receives bonus units, and then sells the original units before the record date for the bonus issue, claiming a capital loss while retaining the bonus units.
Budget 2022 amended Section 94 of the Income Tax Act to make bonus stripping provisions applicable to securities, including units of RETIs and InvITs.
Units of Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and Alternative Investment Funds (AIFs) are now covered, along with other securities.
These amendments will take effect from April 1, 2023, and will apply to the assessment year 2023-24 and subsequent assessment years.
The amendments are designed to prevent tax evasion by closing loopholes related to bonus stripping in certain investment vehicles.
CAclubindia
