{"act":{"id":"finance-act-2021","short_title":"The Finance Act, 2021","long_title":"An Act to give effect to the financial proposals of the Central Government for the financial year 2021-2022.","act_number":null,"act_year":2021,"enact_date":null,"enforcement_date":null,"ministry":"Ministry of Finance","department":"Department of Revenue","jurisdiction":"CENTRAL","unit":"section","section_count":180,"in_force":true,"spent":false,"spent_note":null,"duplicate_of":null,"text_source":"published","scan_url":null,"url":"https://indiacode.ecourtsindia.com/finance-act-2021/"},"unit":"section","section":{"number":"5","heading":"Insertion of new section 9B","text":"Insertion of new section 9B. 5.  After section 9A of the Income-tax Act, the following section shall be inserted, namely:— '9B. Income on receipt of capital asset or stock in trade by specified person from specified entity.—(1) Where a specified person receives during the previous year any capital asset or stock in trade or both from a specified entity in connection with the dissolution or reconstitution of such specified entity, then the specified entity shall be deemed to have transferred such capital asset or stock in trade or both, as the case may be, to the specified person in the year in which such capital asset or stock in trade or both are received by the specified person. (2) Any profits and gains arising from such deemed transfer of capital asset or stock in trade or both, as the case may be, by the specified entity shall be— (i) | deemed to be the income of such specified entity of the previous year in which such capital asset or stock in trade or both were received by the specified person; and (ii) | chargeable to income-tax as income of such specified entity under the head \"Profits and gains of business or profession\" or under the head \"Capital gains\", in accordance with the provisions of this Act. (3) For the purposes of this section, fair market value of the capital asset or stock in trade or both on the date of its receipt by the specified person shall be deemed to be the full value of the consideration received or accruing as a result of such deemed transfer of the capital asset or stock in trade or both by the specified entity. (4) If any difficulty arises in giving effect to the provisions of this section and sub-section (4) of section 45, the Board may, with the approval of the Central Government, issue guidelines for the purposes of removing the difficulty. (5) Every guideline issued by the Board under sub-section (4) shall, as soon as may be after it is issued, be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the assessee. Explanation.—For the purposes of this section,— (i) | \"reconstitution of the specified entity\" means, where— (a) | one or more of its partners or members, as the case may be, of such specified entity ceases to be partners or members; or (b) | one or more new partners or members, as the case may be, are admitted in such specified entity in such circumstances that one or more of the persons who were partners or members, as the case may be, of the specified entity, before the change, continue as partner or partners or member or members after the change; or (c) | all the partners or members, as the case may be, of such specified entity continue with a change in their respective share or in the shares of some of them; (ii) | \"specified entity\" means a firm or other association of persons or body of individuals (not being a company or a co-operative society); (iii) | \"specified person\" means a person, who is a partner of a firm or member of other association of persons or body of individuals (not being a company or a co-operative society) in any previous year.'.","html":"<p><b>Insertion of new section 9B.</b></p><p><b>5. </b> After section 9A of the Income-tax Act, the following section shall be inserted, namely:—</p><p>'9B. <i>Income on receipt of capital asset or stock in trade by specified person from specified entity.—</i>(1) Where a specified person receives during the previous year any capital asset or stock in trade or both from a specified entity in connection with the dissolution or reconstitution of such specified entity, then the specified entity shall be deemed to have transferred such capital asset or stock in trade or both, as the case may be, to the specified person in the year in which such capital asset or stock in trade or both are received by the specified person.</p><p><span class=\"num\">(2)</span> Any profits and gains arising from such deemed transfer of capital asset or stock in trade or both, as the case may be, by the specified entity shall be—</p><div class=\"tablewrap\"><table class=\"dtable\"><tr><td>(<i>i</i>)</td><td></td><td>deemed to be the income of such specified entity of the previous year in which such capital asset or stock in trade or both were received by the specified person; and</td></tr><tr><td>(<i>ii</i>)</td><td></td><td>chargeable to income-tax as income of such specified entity under the head \"Profits and gains of business or profession\" or under the head \"Capital gains\", in accordance with the provisions of this Act.</td></tr></table></div><p><span class=\"num\">(3)</span> For the purposes of this section, fair market value of the capital asset or stock in trade or both on the date of its receipt by the specified person shall be deemed to be the full value of the consideration received or accruing as a result of such deemed transfer of the capital asset or stock in trade or both by the specified entity.</p><p><span class=\"num\">(4)</span> If any difficulty arises in giving effect to the provisions of this section and sub-section (4) of section 45, the Board may, with the approval of the Central Government, issue guidelines for the purposes of removing the difficulty.</p><p><span class=\"num\">(5)</span> Every guideline issued by the Board under sub-section (4) shall, as soon as may be after it is issued, be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the assessee.</p><p><i>Explanation.</i>—For the purposes of this section,—</p><div class=\"tablewrap\"><table class=\"dtable\"><tr><td>(<i>i</i>)</td><td></td><td>\"reconstitution of the specified entity\" means, where—</td></tr></table></div><div class=\"tablewrap\"><table class=\"dtable\"><tr><td>(<i>a</i>)</td><td></td><td>one or more of its partners or members, as the case may be, of such specified entity ceases to be partners or members; or</td></tr><tr><td>(<i>b</i>)</td><td></td><td>one or more new partners or members, as the case may be, are admitted in such specified entity in such circumstances that one or more of the persons who were partners or members, as the case may be, of the specified entity, before the change, continue as partner or partners or member or members after the change; or</td></tr><tr><td>(<i>c</i>)</td><td></td><td>all the partners or members, as the case may be, of such specified entity continue with a change in their respective share or in the shares of some of them;</td></tr></table></div><div class=\"tablewrap\"><table class=\"dtable\"><tr><td>(<i>ii</i>)</td><td></td><td>\"specified entity\" means a firm or other association of persons or body of individuals (not being a company or a co-operative society);</td></tr><tr><td>(<i>iii</i>)</td><td></td><td>\"specified person\" means a person, who is a partner of a firm or member of other association of persons or body of individuals (not being a company or a co-operative society) in any previous year.'.</td></tr></table></div>","words":553,"text_source":"published"},"classification":[],"instruments":[],"judgments":[],"corresponds_to":[],"url":"https://indiacode.ecourtsindia.com/finance-act-2021/section/5/","note":null,"source_note":"Harvested from the Income Tax Department's own portal at incometaxindia.gov.in, which publishes the Finance Acts section by section. India Code carries none of them: its Central community holds the Acts that stand as general law, and a Finance Act is an amending and rate-fixing instrument.","judgments_note":"Judgment holdings are the ratio decidendi as extracted from the order by eCourts India, reproduced unaltered. Reported judgments only.","licence":"Published with commentary and other original matter under s.52(1)(q)(ii), Copyright Act 1957."}