The Central Government has notified the amendment of Rule 11UAC of the Income Tax Rules, 1962.Rule 11UACdraws its origin from Section 56(2)(x)(XI) of the Income Tax Act, 1961.
The sub-clause deals with the class of persons to whom the provisions of Section 56(2)(x) shall not apply. Section 56(2)(x): Section 56 is the charging section of Income from other sources, sub-section (2) of which provides a particular list of incomes which are chargeable under the head, income from other sources, clause (x) being a part of that list.
The Central Board of Direct Taxes, in the exercise of the powers conferred by clause (XI) of the proviso to clause (x) of subsection (2) of section 56 read with section 295 of the Income-tax Act, 1961 (43 of 1961), amended the Income-tax Rules, 1962, namelyfor clause (4),
“(4) any movable property, being equity shares, of a public sector company or a company, received by a person from a public sector company or the Central Government or any State Government under strategic disinvestment.
Explanation – For this clause, ‘strategic disinvestment’ shall have the same meaning as assigned to it in clause (iii) of Explanation to clause (d) of sub-section (1) of section 72A.”.
Rule Before amendment
The provisions of clause (x) of sub-section (2) of section 56 shall not apply to,‑ (1) any immovable property, being land or building or both, received by a resident of an unauthorised colony in the National Capital Territory of Delhi, where the Central Government by notification in the Official Gazette, regularised the transactions of such immovable property based on the latest Power of Attorney, Agreement to Sale, Will, possession letter and other documents including documents evidencing payment of consideration for conferring or recognising the right of ownership or transfer or mortgage regarding such immovable property in favour of such resident.
(2) any movable property, being unquoted shares, of a company and its subsidiary and the subsidiary of such subsidiary received by a shareholder, where,— (i) 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; and (ii) share of the company and its subsidiary and the subsidiary of such subsidiary has been received under 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.
(3) any movable property, being equity shares, of the reconstructed bank, received by the investor or the investor bank where the said share has been allotted by the reconstructed bank under the scheme at a price specified in sub-paragraph (3) of paragraph 3 of the scheme.
Equity sharesof a public sector company or a company, received by a person from a public sector company or the Central Government or any State Government under strategic disinvestment shall not be chargeable as income from other sources under Section 56(2)(x).
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