Capital gains
E.—Capital gains
Capital gains.
45. 3[(1)] Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections
4[53, 54, 54B, 5[* * *] 6[7[54D, 54E and 54F]]], be chargeable to income-tax under head "Capita! gains", and shall be deemed to be the income of the previous year in which the transfer took place.
The following new sub-section (2) shall be inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985. Originally it was inserted by the Finance Act, 1964, w.e.f. 1-4-1964 and was later omitted by the Finance Act, 1966, w.e.f. 1-4-1966 :
(2) Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as, stock-in-trade of a business carried on by him shall he chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48. the fair market value of the asset on the dote of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset.
(3) and (4) 8[* * *]
3. Inserted by the Finance Act, 1964, w.e.f. 1-4-1964 and deemed to have been omitted with omissions of sub-sections (2) to (4) by the Finance Act, 1966, w.e.f. 1-4-1966.
4. "53, 54 and 54B" substituted for "53 and 54" by the Finance Act, 1970, w.e.f. 1-4-1970, "53, 54, 54B and 54C" substituted for "53, 54 and 54B" by the Finance Act, 1972, w.e.f. 1-4-1973 and "53, 54, 54B, 54C and 54D" substituted for "53, 54, 54B and 54C" by the Finance Act, 1973, w e.f. 1-4-1974.
5. "54C" omitted by the Finance Act, 1976. w.e.f. 1-4-1976.
6. Substituted for "and 54D" by the Finance (No. 2) Act. 1977. w.e.f. 1-4-1978
7. Substituted for "54D and 54E" by the Finance Act, 1982, w.e.f. 1-4-1983.
8. Omitted by the Finance Act, 1966, w.e.f. 1-4-1966. Earlier, these sub-sections were inserted by the Finance Act, 1964, w.e.f. 1-4-1964.
[As amended by the Taxation Laws (amendment) Act, 1984]