Section 46A of Income Tax Act for AY 2023-24

Section 46A of Income Tax Act amended by Finance Act. Capital gains on purchase by company of its own shares or other specified securities.

Amended and updated notes on section 46A 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 capital gains on purchase by company of its own shares or other specified securities.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 46A of IT Act 1961-2023 provides for capital gains on purchase by company of its own shares or other specified securities.

Recently, we have discussed in detail section 46 (capital gains on distribution of assets by companies in liquidation) of IT Act 1961. Today, we learn the provisions of section 46A of Income-tax Act 1961. The amended provision of section 46A 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 46A 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-46A: Capital gains on purchase by company of its own shares or other specified securities

Where a shareholder or a holder of other specified securities receives any consideration from any company for purchase of its own shares or other specified securities held by such shareholder or holder of other specified securities, then, subject to the provisions of section 48, the difference between the cost of acquisition and the value of consideration received by the shareholder or the holder of other specified securities, as the case may be, shall be deemed to be the capital gains arising to such shareholder or the holder of other specified securities, as the case may be, in the year in which such shares or other specified securities were purchased by the company.

Explanation: For the purposes of this section, “specified securities” shall have the meaning assigned to it in Explanation to section 77A of the Companies Act, 1956 (1 of 1956).


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