Income Tax Act, 2025  ·  Chapter IV — Computation of Total Income  ·  Section 70

Section 70
Transactions not regarded as transfer

IT Act 2025 Chapter IV Effective 1 April 2026 Old: 47
New Provision
Section 70, IT Act 2025
Replaces (IT Act 1961)
47
Chapter
Chapter IV — Computation of Total Income
Effective From
1 April 2026
Statutory Text — Section 70

(1) The provisions of section 67 shall not apply to transfer— (a) by way of distribution of capital assets on the total or partial partition of a Hindu undivided family; (b) of a capital asset by an individual or a Hindu undivided family, under a will or a gift or an irrevocable trust; (c) of a capital asset, not being stock-in-trade, by a company to its subsidiary company, if— (i) the parent company or its nominees hold the whole of the share capital of the subsidiary company; and (ii) the subsidiary company is an Indian company; (d) of a capital asset, not being stock-in-trade, by a subsidiary company to the holding company, if–– (i) the whole of the share capital of the subsidiary company is held by the holding company; and (ii) the holding company is an Indian company;

CH. IV E.- CAPITAL GAINS [Sec 67-91] (e) in a scheme of amalgamation, of a capital asset by the amalgamating company to the amalgamated company, if the amalgamated company is an Indian company; (f) by a shareholder, in a scheme of amalgamation, of a capital asset being a share or shares held by him in the amalgamating company, if— (i) the transfer is made in consideration of allotment to him of any share or shares in the amalgamated company except when the shareholder itself is the amalgamated company; and (ii) the amalgamated company is an Indian company; (g) in a scheme of amalgamation, to him of a capital asset being a share or shares held in an Indian company by the amalgamating foreign company to the amalgamated foreign company, if— (i) at least 25% of the shareholders of the amalgamating foreign company continue to remain shareholders of the amalgamated foreign company; and (ii) such transfer does not attract tax on capital gains in the country, in which the amalgamating company is incorporated; (h) in a scheme of amalgamation, of a capital asset, being a share of a foreign company, referred to in section 9(10)(a), which derives directly or indirectly, its value substantially from the share or shares of an Indian company, held by the amalgamating foreign company to the amalgamated foreign company, if— (i) at least 25% of the shareholders of the amalgamating foreign company continue to remain shareholders of the amalgamated foreign company; and (ii) such transfer does not attract tax on capital gains in the country in which the amalgamating company is incorporated; (i) of a capital asset by a banking company to a banking institution under a scheme of amalgamation of a banking company with a banking institution sanctioned and brought into force by the Central Government under section 45(7) of the Banking Regulation Act, 1949; (j) in a demerger, of a capital asset by the demerged company to the resulting company, if the resulting company is an Indian company; (k) of shares by the resulting company or issue of shares by such company, in a scheme of demerger to the shareholders of the demerged company, if the transfer or issue is made in consideration of demerger of the undertaking; (l) of a capital asset in a demerger, being a share or shares held in an

Shahi & Co. — Our Understanding
This section falls under Chapter IV which governs the computation of total income under all five heads: Salaries, House Property, Business & Profession, Capital Gains, and Other Sources.
Practical Note: All income earned by a taxpayer in a tax year must be computed under one of these heads. Proper classification determines the applicable deductions, set-off rules, and tax rates.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 70 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to egazette.gov.in or incometaxindia.gov.in. This does not constitute legal or tax advice.