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46. Capital gains
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D.—Capital gains
46. Capital gains.—(1) The income from the transfer of any investment asset shall be computed under the head "Capital gains".
(2) The income under the head "Capital gains" shall, without prejudice to the generality of the foregoing provisions, include the following, namely :—
(a) income from the transfer referred to in clause (d) or clause (e) of sub-section (1) of section 47, if before the expiry of a period of eight years from the date of transfer of the investment asset,—
(i) the parent company, or its nominee, ceases to hold the whole of the share capital of the subsidiary company ; or
(ii) the investment asset is converted by the transferee into, or treated by it as, its business trading asset ;
(b) the income from the transfer referred to in clause (f) of sub-section (1) of section 47, if any of the conditions laid down in clause (16) or clause (74) of section 314, as the case may be, is not complied with ;
(c) the income from the transfer referred to in clause (j) or clause (n) of sub-section (1) of section 47, as the case may be, if any of the conditions laid down in the said clauses is not complied with ;
(d) the amount of withdrawal referred to in sub-section (4) of section 55 to the extent deduction has been allowed under sub-section (2) thereof, if the condition laid down in the said sub-section (4) is not complied with ;
(e) the amount of deposit referred to in sub-section (5) of section 55 to the extent deduction has been allowed under sub-section (2) thereof, if the condition laid down in the said sub-section (5) is not complied with.
(f) the amount of deduction allowed under sub-section (1) of section 55, if any of the conditions specified in sub-section (6) of the said section is not complied with.
Clause 46 provides that the income from the transfer of any investment asset shall be computed under the head "Capital gains". In addition to such income, the income under the head "Capital gains" shall also include—
(a) income from the transfer referred to in item (d) or item (e) of sub-clause (1) of clause 47, if the parent company or its nominee ceases to hold the whole of the share capital of the subsidiary company or the investment asset is converted by the transferee into, or treated by it as, its business trading asset, before the expiry of a period of eight years from the date of such transfer ;
(b) the income from the transfer referred to in item (f) of sub-clause (1) of clause 47, if any of the conditions laid down in sub-clause (16) or sub-clause (74) of clause 314 is not complied with ;
(c) the income from the transfer referred to in item (j) or item (n) of sub-clause (1) of clause 47, if any of the conditions laid down in the said clauses is not complied with ;
(d) the amount of withdrawal referred to in sub-clause (4) of clause 55 to the extent of deduction allowed under sub-clause (2) thereof, if the condition laid down in the said sub-clause (4) is not complied with ;
(e) the amount of deposit referred to in sub-clause (5) of clause 55 to the extent of deduction allowed under sub-clause (2) thereof, if the condition laid down in the said sub-clause is not complied with.
(f) the amount of deduction allowed under sub-section (1) of section 55, if any of the conditions specified in sub-section (6) of the section (55) is not complied with.
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