Insertion of new section 9B
Section 5 of the Finance Act, 2021 deals with insertion of new section 9B. Insertion of new section 9B. 5. After section 9A of the Income-tax Act, the following section shall be inserted, namely:— '9B.
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; Section 5, The Finance Act, 2021.
(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.'.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Questions about Section 5
What does Section 5 of the Finance Act deal with?
Section 5 of the Finance Act is headed "Insertion of new section 9B". Insertion of new section 9B. 5. After section 9A of the Income-tax Act, the following section shall be inserted, namely:— '9B.
How do I find court cases under Section 5 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 2021 5, section 5 Finance Act 2021, section 5 of the Finance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 5 of the Finance Act, and has it changed?
Its own text turns on section 45 (Amendment of section 151A), Income-tax Act 9A (Certain activities not to constitute business connection in India), so none of them can safely be read on its own. 3 other provisions in this corpus refer back to it.
When was the Finance Act enacted?
Finance Act was enacted in 2021. 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
- Fourth Schedule. Fourth Schedule26628 words
- First Schedule. First Schedule9574 words
- 2. Income-tax5993 words
- 6. Amendment of section 103582 words
- 130. Substitution of new section for section 43513 words
- 131. Substitution of new section for section 52699 words
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.