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Section21
The Finance Act, 1998

Amendment of section 47

In force As on 18 Oct 2026

Ministry Finance Cited by 1 provision

Section 21 of the Finance Act, 1998 deals with amendment of section 47. Amendment of section 47. 21. In section 47 of the Income-tax Act,— (a ) in clause (xi), for the figures, letters and words "31st day of December, ", the figures, letters and words "31st day of December, " shall be substituted and shall be deemed to have been substituted with effect from the 1st day

Amendment of section 47.

21. In section 47 of the Income-tax Act,—

(a ) in clause (xi), for the figures, letters and words "31st day of December, 1997", the figures, letters and words "31st day of December, 1998" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 1998;

(b ) after clause (xii), the following clauses shall be inserted with effect from the 1st day of April, 1999, namely :—

"(xiii) where a firm is succeeded by a company in the business carried on by it as a result of which the firm sells or otherwise transfers any capital asset or intangible asset to the company :

Provided that—

(a) all the assets and liabilities of the firm relating to the business immediately before the succession become the assets and liabilities of the company;

(b) all the partners of the firm immediately before the succession become the shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of succession;

(c) the partners of the firm do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company; and

(d) the aggregate of the shareholding in the company of the partners of the firm is not less than fifty per cent of the total voting power in the company and their shareholding continues to be as such for a period of five years from the date of the succession;

(xiv) where a sole proprietary concern is succeeded by a company in the business carried on by it as a result of which the sole proprietary concern sells or otherwise transfers any capital asset or intangible asset to the company :

Provided that—

(a) all the assets and liabilities of the sole proprietary concern relating to the business immediately before the succes­sion become the assets and liabilities of the company;

(b) the shareholding of the sole proprietor in the company is not less than fifty per cent of the total voting power in the company and his shareholding continues to so remain as such for a period of five years from the date of the succession; and

(c) the sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company;

(xv) any transfer in a scheme for lending of any securities under an agreement or arrangement, which the assessee has entered into with the borrower of such securities and which is subject to the guidelines issued by the Securities and Exchange Board of India, established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), in this regard.".

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Section 21, The Finance Act, 1998.

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

  1. s. 47 Amendment of section 192
  2. Income-tax Act s. 47 Transactions not regarded as transfer
  3. Securities and Exchange Board of India Act s. 3 Establishment and incorporation of Board

Referred to by 1

  1. s. 83 Amendment of section 21

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

  1. Rexnord Electronics and Controls LTD vs Union of India

    Supreme Court of India 04 Mar 2008 Binding (SC)

    Court's Decision & Legal Precedent

    The jurisdiction of the Settlement Commission under Section 127H of the Customs Act to grant immunity from interest is limited to interest payable under the provisions of the Customs Act itself. Interest payable under a contractual bond executed in terms of an exemption or duty notification, though issued under statutory authority, retains its contractual character and falls outside the Settlement Commission's powers of waiver or immunity. The Settlement Commission lacks the authority to grant immunity from such contractual obligations without the consent of both parties to the contract.

    On this section: Inserted Chapter XIVA into the Customs Act, establishing the settlement mechanism

    Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.

Questions about Section 21

What have the courts held on Section 21 of the Finance Act?

Rexnord Electronics and Controls LTD vs Union of India (04 Mar 2008) is the leading judgment on this section among those set out below: Inserted Chapter XIVA into the Customs Act, establishing the settlement mechanism.

How do I find court cases under Section 21 of the Finance Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Finance Act 1998 21, section 21 Finance Act 1998, section 21 of the Finance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Rexnord Electronics and Controls LTD vs Union of India (04 Mar 2008).

What should I read with Section 21 of the Finance Act, and has it changed?

Its own text turns on section 47 (Amendment of section 192), Income-tax Act 47 (Transactions not regarded as transfer), Securities and Exchange Board of India Act 3 (Establishment and incorporation of Board), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.

When was the Finance Act enacted?

Finance Act was enacted in 1998. India Code records no commencement date for it. It is in force as at the date shown on this page.

Other sections of this Act

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. 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. This page is not a substitute for legal advice.