Section 13 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002
- (1)Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961) or any other enactment for the time being in force relating to tax on income, profits or gains, no income-tax or any other tax shall be payable by the Administrator in relation to the specified undertaking 1[for the period beginning on the appointed day and ending on the 2[31st day of March, 3[2027]] in respect of any income, profits or gains derived, or any amount received in relation to the specified undertaking.
- (2)The transfer and vesting of the undertaking or the specified undertaking in terms of section 4 shall not be construed as a transfer within the meaning of the Income-tax Act, 1961 (43 of 1961) for the purposes of capital gains.
Summary
- The Administrator does not have to pay income tax or any other tax on income, profits, or gains related to the specified undertaking.
- This tax exemption starts on the appointed day and lasts until the 31st day of March, 2027.
- This exemption applies no matter what the Income-tax Act, 1961 or other tax laws say.
- When properties and businesses are handed over to the new managers under section 4, it is not treated as a transfer that triggers capital gains taxes under the Income-tax Act, 1961.
Practical examples
FAQ
1. Does the Administrator have to pay income tax on profits made before March 2027?
No, the Administrator is completely exempt from paying tax on profits and gains until the 31st day of March, 2027.
2. What happens if the Income-tax Act, 1961 says a tax is due on these profits?
This Act overrides the Income-tax Act, 1961 for these specific situations, so no tax is payable.
3. Is the handover of the old Trust's assets considered a taxable transfer for capital gains?
No, the law clearly states that this handover, as described in section 4, does not count as a transfer for capital gains purposes.
Test yourself
Q1.Under Section 13 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, until what date is the Administrator exempt from paying income tax on profits?
Q2.Under Section 13 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, which specific law is mentioned as not applying to the transfer of the undertaking for capital gains purposes?
Q3.Section 13 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 provides a tax exemption on the transfer of the undertaking. According to the cross-referenced Section 4 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, who are the two parties that receive this vesting of assets?
Q4.Under Section 13 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, what type of specific tax does the act say is avoided when the transfer and vesting happen under Section 4?
Q5.Under Section 13 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, what kinds of earnings are exempt from tax for the Administrator?