Prescribed class of persons for the purpose of section 50CA. Rule 11UAD. Section 50CA not to apply to transfer of unquoted shares of company/subsidiary
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 42/2020
New Delhi, the 30th June, 2020
G.S.R.423(E).—In exercise of the powers conferred by section 50CA read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules,1962, namely:─
1. Short title and commencement.‒(1) These rules may be called the Income-tax (15th Amendment) Rules, 2020.
(2) They shall come into force from the 1st day of April, 2020 and shall be applicable for assessment year 2020-21 and subsequent assessment years.
2. In the Income-tax Rules, 1962, after the rule 11UAC, the following rule shall be inserted, namely:—
Prescribed class of persons for the purpose of section 50CA
11UAD. The provisions of section 50CA of the Act shall not apply to transfer of any movable property, being unquoted shares, of a company and its subsidiary and the subsidiary of such subsidiary by an assessee, 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 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.
Explanation.-For the purposes of this sub-rule,-
(a) 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;