Section - 47 - Tax neutral conversion of
preference shares to equity shares -
Finance Act,2016 amended section
47 of the Act so as to provide tax neutrality to the transfer of units in a
consolidating plan of mutual fund scheme made in consideration of the allotment
of units in the consolidated plan of that mutual fund scheme.
It is proposed to amend section
2(42A) and section 49 to provide that cost of acquisition of the units in the
consolidated plan of mutual fund scheme referred to in section 47(xix) shall be
the cost of units in consolidating plan of mutual fund scheme and period of
holding of the units of consolidated plan of mutual fund scheme shall include
the period for which the units in consolidating plan of mutual fund scheme were
held by the assessee.
amendment will be effective from 1st April 2017