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  • CA Kuldeep Arora

Proposed Amendments in provisions of Capital Gain in Budget 2019



Capital Gain

1. Amendment in calculation of FMV u/s 50CA

The existing provision of section 50CA of the Income Tax Act provides for special provision for full value of consideration for transfer of share other than quoted share. The said section provides that where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being share of a company other than a quoted share, is less than the fair market value of such share determined in such manner as may be prescribed, the value so determined shall, for the purposes of computing capital gains, be deemed to be full value of consideration received or accruing as a result of such transfer.


It is proposed to amend the said section so as to provide that the provision of the said section shall not apply to any consideration received or accruing as a result of transfer by such class of persons and subject to such conditions as may be prescribed.


2. Concessional rate u/s 111A extended to certain equity oriented fund

In order to incentivise fund of funds set up for disinvestment of Central Public Sector Enterprises (CPSEs), Finance Act, 2018 has provided concessional rate of long-term capital gains tax under section 112A of the Act for the transfer of units of such fund of funds. In order to further incentivise these funds of funds, it is proposed to amend section 111A so as to extend the concessional rate of tax for short-term capital gains in respect of transfer of units of such fund of funds.

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