Section 43C of Income Tax Act for AY 2023-24

Section 43C of Income Tax Act amended by Finance Act and IT Rules. Special provision for computation of cost of acquisition of certain asset.

Amended and updated notes on section 43C of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to special provision for computation of cost of acquisition of certain assets.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 43C of IT Act 1961-2023 provides for special provision for computation of cost of acquisition of certain assets.

Recently, we have discussed in detail section 43B (certain deductions to be only on actual payment) of IT Act 1961. Today, we learn the provisions of section 43C of Income-tax Act 1961. The amended provision of section 43C is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 43C of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.

Section-43C: Special provision for Computation of cost of acquisition of certain assets

Section 43C(1) of Income Tax Act

Where an asset [not being an asset referred to in sub-section (2) of section 45 which becomes the property of an amalgamated company under a scheme of amalgamation, is sold after the 29th day of February, 1988, by the amalgamated company as stock-in-trade of the business carried on by it, the cost of acquisition of the said asset to the amalgamated company in computing the profits and gains from the sale of such asset shall be the cost of acquisition of the said asset to the amalgamating company, as increased by the cost, if any, of any improvement made thereto, and the expenditure, if any, incurred, wholly and exclusively in connection with such transfer by the amalgamating company.

Section 43C(2) of Income Tax Act

Where an asset [not being an asset referred to in sub-section (2) of section 45 which becomes the property of the assessee on the total or partial partition of a Hindu undivided family or under a gift or will or an irrevocable trust, is sold after the 29th day of February, 1988, by the assessee as stock-in-trade of the business carried on by him, the cost of acquisition of the said asset to the assessee in computing the profits and gains from the sale of such asset shall be the cost of acquisition of the said asset to the transferor or the donor, as the case may be, as increased by the cost, if any, of any improvement made thereto, and the expenditure, if any, incurred, wholly and exclusively in connection with such transfer (by way of effecting the partition, acceptance of the gift, obtaining probate in respect of the will or the creation of the trust), including the payment of gift-tax, if any, incurred by the transferor or the donor, as the case may be.


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