32. (1) The income under the head “Capital gains” shall be computed after making the following deduction from the full value of the consideration received or accruing from the transfer of the capital asset or the fair market value thereof, whichever is higher, namely:-

(a) any expenditure incurred solely in connection with the transfer of the capital asset; or

(b) the cost of acquisition of the capital asset and any capital expenditure incurred for any improvements thereto but excluding any expenditure in respect of which any allowance is admissible under any provisions of sections 23, 29 and 34.

(1A) [Omitted by section 4 of অর্থ আইন, ১৯৯৬ (১৯৯৬ সনের ১৮ নং আইন).]

(2) For the purpose of this section, “cost of acquisition of the capital asset” means-

(i) where it was acquired by the assessee by purchase, the actual cost of acquisition; and

(ii) where it became the property of the assessee-

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(cc) under a deed of gift, bequest or will; or

(ccc) under a transfer on a revocable or irrevocable trust; or]

(d) on any distribution of capital assets on the liquidation of a company; or

(e) on any distribution of capital assets on the dissolution of a firm or other association of persons or the partition of a Hindu undivided family;

the actual cost of acquisition to the previous owner of the capital asset as reduced by the amount of depreciation, if any, allowed to the previous owner; and where the actual cost of acquisition to the previous owner cannot be ascertained, the fair market value at the date on which the capital asset became the property of the previous owner:

Provided that where the capital asset is an asset in respect of which the assessee has obtained depreciation allowance in any year, the cost of acquisition of the capital asset to the assessee shall be its written down value increased or diminished, as the case may be, by any adjustment made under section 19(16) or (17) or section 27(1)(j) or section 29(1) (xi) ⁴[ :

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⁶[ Provided further that where the capital asset became the property of the assessee by succession, inheritance or devolution, the actual cost of acquisition of the capital asset to the assessee shall be the fair market value of the property prevailing at the time the assessee became the owner of such property.]

(3) Where in the opinion of the Deputy Commissioner of Taxes the fair market value of a capital asset transferred by an assessee as on the date of transfer exceeds the full value of the consideration declared by the assessee by an amount of not less than fifteen per cent of the value so declared, the fair market value of the capital asset shall be determined with the previous approval of the Inspecting Joint Commissioner.

(4) Where in the opinion of the Deputy Commissioner of Taxes the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the declared value thereof by more than twenty-five per cent of such declared value, the Government may offer to buy the said asset in such manner as may be prescribed.

(5) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of a capital asset which immediately before the date on which the transfer took place was being used by the assessee for the purposes of his business or profession and the assessee has, within a period of one year before or after that date, purchased a new capital asset for the ⁷[ * * *] purposes of his business or profession, then, instead of the capital gain being charged to tax as income of the income year in which the transfer took place, it shall, if the assessee so elects in writing before the assessment is made, be dealt with in accordance with the following provisions of this sub-section, that is to say-

(a) if the amount of the capital gains is greater than the cost of acquisition of the new asset,-

(i) the difference between the amount of the capital gain and the cost of acquisition of the new asset shall be charged under section 31 as income of the income year, and

(ii) for the purposes of computing in respect of the new asset any allowance under the Third Schedule or the amount of any capital gain arising from its transfer, the cost of acquisition or the written down value, as the case may be, shall be nil, or

(b) if the amount of the capital gain is equal to or less than the cost of acquisition of the new asset,-

(i) the capital gain shall not be charged under section 31, and

(ii) for the purposes of computing in respect of the new asset any allowance under the Third Schedule or any income under section 19(16) or the amount of any capital gain arising from its transfer, the cost of acquisition or the written down value, as the case may be, shall be reduced by the amount of the capital gain:

Provided that where in respect of the purchase of a new capital asset consisting of plant or machinery, the assessee satisfies the Deputy Commissioner of Taxes that despite the exercise of due diligence it has not been possible to make the purchase within the period specified in this sub-section, the Deputy Commissioner of Taxes may, with the prior approval of the Inspecting Joint Commissioner, extend the said period to such date as he considers reasonable.

⁸[(5A) Where any capital gain arises from any transfer of capital asset in a scheme of amalgamation, no tax shall be charged under section 31:

Provided that in a scheme of amalgamation, any consideration received by the shareholders of the amalgamating companies in any manner other than the shares of the amalgamated company shall be subject to applicable tax.]

(6) [Omitted by section 57 of অর্থ আইন, ২০০০ (২০০০ সনের ১৫ নং আইন).]

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(8) [Omitted by section 57 of অর্থ আইন, ২০০০ (২০০০ সনের ১৫ নং আইন).]

(9) [Omitted by section 57 of অর্থ আইন, ২০০০ (২০০০ সনের ১৫ নং আইন).]

(10) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of capital being buildings or lands to a new company registered under ¹⁰[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন),] for setting up of an industry, and if the whole amount of capital gain is invested in the equity of the said company, then the capital gain shall not be charged to tax as income of the year in which the transfer took place.

(11) Notwithstanding anything contained in this section or section 31, where a capital gain arises from the transfer of a capital asset of a firm to a new company registered under ¹¹[ the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, ১৯৯৪ (১৯৯৪ সনের ১৮ নং আইন)], and if the whole amount of the capital gain is invested in the equity of the said company by the partners of the said firm, then the capital gain shall not be charged to tax as income of the year in which the transfer took place.]

(11A) ¹²[ ***]

¹³[ (12) Notwithstanding anything contained in ¹⁴[ sub-sections (5), (7), (10) and (11)], no exemption shall be allowed to any person on so much of profits and gains arising out of the transfer of a capital asset as is attributable to the cost of acquisition of such asset in respect of which any investment allowance referred to in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10 and 11 of PART B of THE SIXTH SCHEDULE to this Ordinance was at any time allowed.]