Home > Income Tax Act 2025 > Section-39Last Updated: Oct 09th 2025
Section-39 provides for certain definitions such as actual cost, written down value, speculative transactions, etc. Learn to understand the section-39 as it is, it's help and useful links to follow.
Here onwards, "Act" refers to "Income Tax Act 2025"
A = total amount of subsidy, grant or reimbursement not directly relatable to the asset;
B = cost of the asset acquired for which actual cost is to be determined;
C = cost of all the assets in respect of or in reference to which the subsidy or grant or reimbursement is so received.
Sl. No. | Specified circumstances | Determination of actual cost |
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A | B | C |
1 | Where capital asset is transferred by an amalgamating company to an amalgamated company being an Indian company in a scheme of amalgamation. | Actual cost to amalgamated company shall be the same as it would have been if the amalgamating company had continued to hold such capital asset for the purpose of its own business. |
2 | Where capital asset is transferred by a demerged company to a resulting company being an Indian company in a demerger. | Actual cost to resulting company shall be the same as it would have been, if the demerged company had continued to hold such asset for the purpose of its own business, which shall not exceed the written down value of such capital asset in the hands of demerged company. |
A | B | C |
3 | Where inventory is converted into or treated as a capital asset. | Fair Market Value of such inventory as on date of conversion, as determined in the manner as may be prescribed. |
4 | Where asset is acquired by the assessee by way of gift or inheritance. | Actual cost to the previous owner as reduced by--
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5 | Where a building, being the property of the assessee, is put to use for the purpose of business or profession during the tax year. | Actual cost of the building as reduced by the depreciation—
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6 | Where capital asset is transferred by—
and the conditions of section 70(1)(c) and (d), as the case may be, are satisfied. | Actual cost to the transferee company shall be the same as it would have been, if the transferor company had continued to hold such asset for the purpose of its own business. |
7 | Where an asset, which previously belonged to the assessee and had been used by him for the purpose of his business or profession, is reacquired by the assessee. |
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8 | Where an asset is acquired by the assessee from previous owner and subsequently asset is given back to the previous owner by way of lease, hire or otherwise, and—
| Actual cost of asset to the assessee shall be the written down value of the asset in the hands of the previous owner at the time of transfer by the previous owner. |
A | B | C |
9 | Where an asset is used in business after it ceases to be used for scientific research related to that business and a deduction is allowable under section 33(3). | Actual cost of asset as reduced by deduction allowed for the capital asset under section 45(1)(a) (i) or under section 35(1)(iv) of the Income-tax Act, 1961(43 of 1961). |
10 | Where the assessee had acquired an asset outside India, as a non-resident, and the asset is brought by him to India and put to use in his business or profession in India. | Actual cost of the asset as reduced by the depreciation––
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11 | Where capital asset is acquired under the scheme of corporatisation of a recognised stock exchange approved by the Securities and Exchange Board of India | Actual cost of the asset, as if there was no corporatisation. |
12 |
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13 | Where any amount is paid or payable as interest in connection with the acquisition of an asset | Actual cost shall not include so much of such amount as is relatable to any period after such asset is first put to use. |
Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.