Non applicability of gift provisions extended to relocationof funds as well

CBDT vide notification dated 18.07.2023 amended Rule 11UAC to provide that, wherein case any shares, units or interest are received for the resultant fund in lieu of shares, units or interest of original fund on account of relocation of fund, then such receipt of shares, units or interest shall not be treated as gift in the hands of recipient provided the following conditions are met:

• Not less than 90% of the shares, units or interest of the resultant fund, are held by the same person or entity in the same proportion as held in the original fund; AND
• Not less than 90% of the shares, units or interest of the original fund, was held by such person or entity.

Lakshay Prakash Jonwal, Direct Tax Associate, SW India