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A transfer but not a transfer

Transactions not regarded as a transfer

We’ve already discussed the sale of capital assets, and the tax implications of such sales. Capital gains tax is an ocean and there are a lot of clauses governing its applicability, exceptions, and exemptions. There are some transfers which are not regarded as transfers for the purpose of computation of capital gains.  In other words, capital gains tax is not attracted over certain property transactions. Those are precisely listed out in section 47 of the Income Tax Act.

  1. Total or partial partition of a Hindu Undivided Family.
  2. Transfer through gift or will or irrevocable trust. (Except ESOP scheme by a company)
  3. Transfer of assets by a parent to its Indian Subsidiary and vice-versa. (All shares of the subsidiary are held by the parent or its nominees)
  4. Transfers in schemes of amalgamation as depicted under clauses vi-vii of section 47.
  5. Transfer outside India of Bonds, GDRs, Derivatives, and other securities as listed under clauses viia-viic of section 47.
  6. Transfer of agricultural land in India effected before 1 Mar 1970.
  7. Transfer of work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print to the Government/University/National Museum/National Art Gallery/National Archives/any such public institution as notified by the Central Government.
  8. Conversion of securities as specified in clauses x-xb of section 47.
  9. Transfer of membership of a registered stock exchange to a company before 31-12-1998.
  10. Transfer of land of a sick industrial company under clause xii
  11. transfer of assets by a firm to a company through succession.
  12. Transfer of membership in SE on demutualisation or corporatisation approved by SEBI.
  13. Transfer of assets on the conversion of a form of business (Clauses xiiib-xiv)
  14. Transfer in a scheme of lending of securities approved by SEBI or RBI
  15. Reverse Mortgage Scheme
  16. Transfer of a share of Special Purpose Vehicle
  17. Transfer of units of a consolidated scheme of Mutual Funds as specified under clauses xviii-xix.
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