750 : Circular No. 750, dated 13-1-1997

SECTIONS 54EA AND 54EB l EXEMPTION OF CAPITAL GAINS ON TRANSFER OF LONG-TERM CAPITAL ASSETS IN CASE OF INVESTMENT IN SPECIFIED SECURITIES, ETC.,

Guidelines for companies and mutual funds in respect of approved investments for purposes of sections 54EA and 54EB

 

1. Circular No. 748, dated 19th December, 1996 (Clarification 1) laid down guide­lines in respect of approved investments for purposes of section 54EA and section 54EB of the Income-tax Act. Subsequent to the issue of those guidelines, the Income-tax (Second Amendment) Ordinance, 1996 has been promulgated on 31-12-1996. By virtue of section 2 of the Ordinance, shares issued by a public company have been included in the investment instruments which would qualify for exemption from capital gains tax under section 54EA and section 54EB.

2. The guidelines laid down for bonds and debentures in Circular No. 748 will also apply to the shares issued by public companies with regard to the procedure for application to the Board as well as with regard to the manner in which the investible capital is to be utilized.

3. For the purposes of sections 54EA and 54EB shares of a public company shall mean primary issue of share capital and "public company" shall have the same meaning as defined in section 3 of the Companies Act, 1956.

Circular : No. 750, dated 13-1-1997.