Circular dated 2nd July 2021 regarding Guidelines under section 9B and sub-section (4) of section 45 of the Income-tax Act, 1961 – CBDT.

• 05th, July 2021
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Circular dated 2^nd July 2021 regarding Guidelines under section 9B and sub-section (4) of section 45 of the Income-tax Act, 1961 – CBDT

• Finance Act, 2021 inserted a new section 98 in the Income-tax Act 1961.
• This section mandates that whenever a specified person receives any capital asset or stock in trade or both from a specified entity, during the previous year, in connection with the dissolution or reconstitution of such specified entity, then it shall be deemed that the specified entity have transferred such capital asset or stock in trade or both, as the case may be, to the specified person.
• Any profits and gains arising from such deemed transfer is 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.
• To remove difficulty, it is clarified that rule 8AB of the Income Tax Rules, 1962 (here in after referred to as “the Rules”) notified vide notification no. 76 dated 02.07.2021 also applies to capital assets forming part of block of assets.