Section – 49 -Cost of acquisition in Tax
neutral demerger of a foreign company -
Under the existing provision of
section 47(vic), the transfer of shares of an Indian company by a demerged
foreign company to a resulting foreign company is not regarded as transfer.
It is proposed to amend section
49 so as to provide that cost of acquisition of the shares of Indian company
referred to in section 47(vic) in the hands of the resulting foreign company
shall be the same as it was in the hands of demerged foreign company.
amendment will be effective from 1st April 2018.