Period of Holding for conversion of Preference shares to Equity SharesÂ
| CLAUSE(S) OF FINANCE BILL, 2017 |
PARTICUL ARS OF AMENDME NTS |
SECTION | AMENDMENT / NEWLY INSERTED |
APPLICABLE W.E.F. | BRIEF OF AMENDMENT |
| 3 | Period of Holding for conversion of Preference shares to Equity Shares | Sub Clause (hf) to clause 1 of Explanation 1 2(42A) | New Insertion | 1/4/2018 | In order to provide tax neutrality to the conversion of preference share of a company into equity share of the same company, it is proposed to amend section 47 to provide that the conversion of preference share of a company into its equity share shall not be regarded as transfer.
Therefore corresponding amendment is made into section 2(42A) to include the period for which Preference Shares were held into period of holding of equity shares. |