Acts Online
GT Shield

Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part II: Special Provisions Relating to Companies

40CA. Acquisitions of assets in exchange for shares or debt issued

 

If a company acquires any asset, as defined in paragraph 1 of the Eighth Schedule, from any person in exchange for—

[Words preceding paragraph (a) substituted by section 89 of Act No. 31 of 2013 - effective 1 April 2013]

(a) 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 market value of the shares immediately after the acquisition; or
(b) any amount of debt 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 that amount of debt.

 

[Section 40CA substituted by section 88 of Act No. 31 of 2013]