CBDT allows Capital Gain relief to difference in Selling price and Its Fair Value [Read Notification]


The Central Board of Direct Taxes (CBDT) on Tuesday notified Income-tax (15th Amendment) Rules, 2020. The exemption is from a provision that says that if shares are sold for a discount, the difference in the selling price and its fair value will be liable for capital gains in the hands of the seller.

They shall come into force from April 1, 2020, and shall be applicable for assessment year 2020-21and subsequent assessment years.

In the Income-tax Rules, 1962, after the rule 11UAC, the rule pertaining to a Prescribed class of persons for the purpose of section 50CA namely, “The provisions of section 50CA of the Act shall not apply to the transfer of any movable property, being unquoted shares, of a company and its subsidiary and the subsidiary of such subsidiary by an assessee, where, the Tribunal, on an application moved by the Central Government under section 241 of the Companies Act, 2013, has suspended the Board of Directors of such company and has appointed new directors nominated by the Central Government under section 242 of the said Act.

Share of such company and its subsidiary and the subsidiary of such subsidiary has been transferred pursuant to a resolution plan approved by the Tribunal under section 242 of the Companies Act, 2013 after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner,” shall be inserted.

“A company shall be a subsidiary of another company if such other company holds more than half in nominal value of the equity share capital of the company,” the notification further explained.

“Tribunal” shall have the same meaning assigned to it in clause (90) of section 2 of the Companies Act, 2013.

To Read the full text of the Notification CLICK HERE