Income-tax Act,1961
Act No : 43
Section :
Cost with reference to certain modes of acquisition
49. Cost with reference to certain modes of acquisition 3[(1)] Where the capital asset became the property of the assessee- (i) on any distribution of assets on the total or partial partition of a Hindu undivided family; (ii) under a gift or will; -------------------------------------------------------------------- 3 Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. --------------------------------------------------------------------- 1.284 (iii) (a) by succession, inheritance or devolution, or 1[(b) on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before the 1st day of April, 987, or] (c) on any distribution of assets on the liquidation of a company, or (d) under a transfer to a revocable or an irrevocable trust, or (e) under any such transfer as is referred to in clause (iV) 2[or clause (V)] 3[or clause (Vi)] 4[or clause (via)] of section 47; 5[(iv) such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of section 64 at any time after the 31st day of December, 1969,] the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. 6[Explanation.-In this 7[sub-section] the expression "previous owner of the property" in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) 8[or clause (iv)] of this 9[sub-section].] 10[(2) Where the capital asset being a share or shares in an amalgamated company which is an Indian company became the property of the assessee in consideration of a transfer referred to in clause (vii) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share or shares in the amalgamating company.] 11[(2A) Where the capital asset, being a share or debenture in a company, became the property of the assessee in consideration of a transfer referred to in clause (x) of section 47, the cost of acquisition of the asset to the assessee shall be deemed to be that part of the cost of debenture, debenture-stock or deposit certificates in relation to which such asset is acquired by the assessee.] ---------------------------------------------------------------------- 1 Substituted by the Finance Act, 1987, w.e.f. 1-4-1988. Prior to the substitution, subclause (b) read as under. "(b) on any distribution of assets on the dissolution of a firm, body of individuals or other association of persons, or" 2 Inserted by the Finance Act, 1965, w.e.f. 1-4-1965. 3 Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. 4 Inserted by the Finance Act, 1992, w.e.f. 1-4-1993. 5 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4- 1976. 6 Inserted by the Finance Act, 1965, w.e.f. 1-4-1965. 7 Substituted for "section' by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. 8 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4- 1976. 9 Substituted for 'section" by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. 10 Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. 11 Inserted by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1962. ------------------------------------------------------------------------ 1.285 1[(3) Notwithstanding anything contained in sub-section (1), where the capital gain arising from the transfer of a capital asset referred to in clause (iv) or, as the case may be, clause (v) of section 47 is deemed to be income chargeable under the head "Capital gains" by virtue of the provisions contained in section 47A, the cost of acquisition of such asset to the transferee company shall be the cost for which such asset was acquired by it.]
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