Provision of Taxability of Gift is not applicable on Equity Shares of PSU, received from Govt. under Strategic Disinvestment: CBDT [Read Notification]

The Central Board of Direct Taxes (CBDT) has notified that the provision of Taxability of Gift is not applicable on equity shares of public sector companies, received from Government under strategic disinvestment with effect from 1 April 2022 and shall be applicable for the assessment year 2022-23 and subsequent assessment years.

The Board has notified the Income-tax (28th Amendment) Rules, 2021 which seeks to amend Income-tax Rules, 1962.

In the Income-tax Rules, 1962, in rule 11UAC, after clause (3), the following clause shall be inserted, namely “(4) any movable property, being equity shares, of the public sector company, received by a person from the Central Government or any State Government under strategic disinvestment.”

The “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.

Rule rule 11UAC pertains to an exemption from deeming provisions of section 56(2)(x) which is applicable only when gifts are received by Individual and HUF, Donor or Donee maybe Resident or non resident.

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