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Taxability of Gift not applicable on Equity Shares: Amended Income Tax Rules, 1962


The Notification dated 10th September, 2021 under powers conferred by clause (XI) of the proviso to clause (x) of sub-section (2) of section 56 read with section 295 of the Income-tax Act, 1961 has amended the Income Tax Rules, 1962. The Central Board of Direct Taxes (CBDT) has inserted clause (4) after clause (3) of rule 11UAC, Income Tax Rules, 1962 to state that the taxability of gift is not applicable on equity shares of public sector companies received from Government under strategic disinvestment with effect from 1st April 2022 and shall be applicable for the assessment year 2022-23 and subsequent assessment years. Additionally, the notification further clarified that the meaning of strategic disinvestment is same as stated in explanation of section 72A. Sources

[1] https://www.incometaxindia.gov.in/communications/notification/notification-no-105-2021.pdf