Section 115TD Tax on accreted income.

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The Tax Publishers 115TD. Tax on accreted income. [1][(1) Notwithstanding anything contained in this Act, where in any previous year, a specified person has (a) converted into any form which is not eligible for grant of registration under Section 12AA or Section 12AB, or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10; (b) merged with any entity other than an entity which is a trust or institution having objects similar to it and registered under Section 12AA or Section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10; or (c) failed to transfer upon dissolution all its assets to any other specified person within a period of twelve months from the end of the month in which the dissolution takes place, then, in addition to the income-tax chargeable in respect of the total income of such specified person, the accreted income of the specified person as on the specified date shall be charged to tax and such specified person shall be liable to pay additional income-tax (herein referred to as tax on accreted income) at the maximum marginal rate on the accreted income. (2) The accreted income for the purposes of subsection (1) means the amount by which the aggregate fair market value of the total assets of the specified person, as on the specified date, exceeds the total liability of such specified person, computed in accordance with the method of valuation, as may be prescribed: Provided that so much of the accreted income as is attributable to the following asset and liability, if any, related to such asset, shall be ignored for the purposes of sub-section (1), namely : (i) any asset which is established to have been directly acquired by the specified person out of its income of the nature referred to in clause (1) of Section 10; (ii) any asset acquired by the specified person during the period beginning from the date of its creation or establishment and ending on the date from which the registration under Section 12AA or Section 12AB or approval under clause (23C) of Section 10 became effective, if the specified person has not been allowed any benefit of Sections 11 and 12 or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10 during the said period: Provided further that where due to the provisions of the first proviso or the second proviso to sub-section (2) of Section 12A or the eighth proviso to clause (23C) of Section 10, the benefit of Sections 11 and 12, or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10 have been allowed to the specified person in respect of any previous year or years beginning prior to the date from which the registration under Section 12AA or Section 12AB or approval under clause (23C) of Section 10 is effective, then, for the purposes of clause (ii) of the first proviso, the registration or approval shall be deemed to have become effective from the first day of the earliest previous year: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

115TD. Tax on accreted income.

[1][(1) Notwithstanding anything contained in this Act, where in any previous year, a specified person has

(a) converted into any form which is not eligible for grant of registration under Section 12AA or Section 12AB, or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10;

(b) merged with any entity other than an entity which is a trust or institution having objects similar to it and registered under Section 12AA or Section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10; or

(c) failed to transfer upon dissolution all its assets to any other specified person within a period of twelve months from the end of the month in which the dissolution takes place,

then, in addition to the income-tax chargeable in respect of the total income of such specified person, the accreted income of the specified person as on the specified date shall be charged to tax and such specified person shall be liable to pay additional income-tax (herein referred to as tax on accreted income) at the maximum marginal rate on the accreted income.

(2) The accreted income for the purposes of subsection (1) means the amount by which the aggregate fair market value of the total assets of the specified person, as on the specified date, exceeds the total liability of such specified person, computed in accordance with the method of valuation, as may be prescribed:

Provided that so much of the accreted income as is attributable to the following asset and liability, if any, related to such asset, shall be ignored for the purposes of sub-section (1), namely :

(i) any asset which is established to have been directly acquired by the specified person out of its income of the nature referred to in clause (1) of Section 10;

(ii) any asset acquired by the specified person during the period beginning from the date of its creation or establishment and ending on the date from which the registration under Section 12AA or Section 12AB or approval under clause (23C) of Section 10 became effective, if the specified person has not been allowed any benefit of Sections 11 and 12 or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10 during the said period:

Provided further that where due to the provisions of the first proviso or the second proviso to sub-section (2) of Section 12A or the eighth proviso to clause (23C) of Section 10, the benefit of Sections 11 and 12, or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of Section 10 have been allowed to the specified person in respect of any previous year or years beginning prior to the date from which the registration under Section 12AA or Section 12AB or approval under clause (23C) of Section 10 is effective, then, for the purposes of clause (ii) of the first proviso, the registration or approval shall be deemed to have become effective from the first day of the earliest previous year: