The Income-tax (Eighth Amendment) Rules, 2023 were notified by the Central Board of Direct Taxes (CBDT) on May 31, 2023. The rules amend the Income-tax Rules, 1962 to provide for exemption from tax on the value of any movable property, being equity shares, of a public sector company or a company, received by a person from a public sector company or the Central Government or any State Government under strategic disinvestment.
The rules define "strategic disinvestment" as the sale of a controlling stake in a public sector company or a company to a private entity. The rules also provide that the exemption will be available only if the equity shares are acquired by the person on or after the date of notification of the rules.
The amendment is aimed at providing a boost to the government's disinvestment program. The government has set a target of raising Rs.1.75 lakh crore through disinvestment in the current financial year.
Official copy of the notification has been mentioned below
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi, the 31st May, 2023
G.S.R. 403(E).- In exercise of the powers conferred by clause (XI) of the proviso to clause (x) of subsection (2) of section 56 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: ‒
1. Short title and commencement.
(1) These rules may be called the Income-tax (Eighth Amendment) Rules, 2023.
(2) They shall come into force from the 1st day of April, 2023 and shall be applicable for the assessment year 2023-2024 and subsequent assessment years.
2. In the Income-tax Rules, 1962, in rule 11UAC, for clause (4), the following clause shall be substituted, namely:
"(4) any movable property, being equity shares, of a public sector company or a company, received by a person from a public sector company or the Central Government or any State Government under strategic disinvestment.
Explanation - For the purposes of this clause, 'strategic disinvestment' shall have the same meaning as assigned to it in clause (iii) of Explanation to clause (d) of sub-section (1) of section 72A.".
[Notification No. 35 /2023/F. No. 370142/ 14 /2023-TPL]
JIVITESH ANAND, Under Secy. (Tax Policy and Legislation)
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969(E), dated the 26th March, 1962 and last amended by the Income-tax (Seventh Amendment) Rules, 2023, vide notification number G.S.R. 399 (E), dated 30th May, 2023
Explanatory Memorandum: It is certified that no person is being adversely affected by giving retrospective effect to this notification.