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Income Tax Act, 1962 (Act No. 58 of 1962)

Chapter II : The Taxes

Part II : Special Provisions Relating to Companies

40CA. Acquisitions of assets in exchange for shares

[Section 40CA heading substituted by section 32(1) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 (section 32(2)]

 

Where a company acquires any asset, as defined in paragraph 1 of the Eighth Schedule, from any person in exchange for shares issued by that company, that company must be deemed to have actually incurred an amount of expenditure in respect of the acquisition of that asset which is equal to the sum of—

(a) the market value of the shares immediately after the acquitision; and
(b) any deemed capital gain determined in terms of section 24BA(3)(a) in respect of the acquisition of that asset.

 

[Section 40CA substituted by section 32(1) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 and applies in respect of acquisitions of assets made on or after that date (section 32(2)]