Rule 58Published

Rule 58: Specified receipt and share-transfer exceptions

Rule 58 identifies five conditional classes of receipts to which section 92(2)(m) does not apply. It also gives a narrower section 79 transfer exception tied specifically to the table’s second row.

Official notified Income-tax Rules, 2026

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On this page

Bare law
Match the person, asset and conditions in one row
Delhi unauthorised-colony property receipts
Tribunal-approved company resolution shares
Reconstructed-bank and strategic-disinvestment shares
Fund-relocation management-entity conditions
Practical exception file and limited scope
Key takeaways
Practical checklist
FAQs
Glossary
Official sources

Bare law

Rule 58 - Prescribed class of persons for the purpose of section 92(3)(i) and section 79
(1) The provisions of section 92(2)(m) shall not apply to class of persons referred to in column B of the following Table, where such persons receive assets in the nature referred to in column C, subject to satisfaction of the conditions specified in column D thereof:
S. No Class of persons Nature of Asset Conditions
1. Resident of an unauthorised colony in the National Capital Territory of Delhi. Any immovable property being land or building, or both. Where the Central Government by notification, regularised the transactions of such immovable property based on the latest power of attorney, agreement to sale, will, possession letter and other documents including documents evidencing payment of consideration for conferring or recognising right of ownership or transfer or mortgage in regard to such immovable property in favour of such resident.
2. Shareholder. Any movable property, being unquoted shares, of a company or its subsidiary or the subsidiary of such subsidiary (a) Where the Tribunal, on an application moved by the Central Government under section 241 of the Companies Act, 2013 (18 of 2013), has suspended the Board of Directors of such company and has appointed new directors nominated by the Central Government under section 242 of the said Act; and (b) where the share of the company or its subsidiary or the subsidiary of such subsidiary has been received by the shareholder pursuant to a resolution plan approved by the Tribunal under section 242 of the Companies Act, 2013 (18 of 2013) after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner.
3 Investor or the Investor bank Any movable property, being equity shares, of the reconstructed bank Where the said share has been allotted by the reconstructed bank under the Scheme at a price specified in paragraph 3(3) of the Scheme.
4 Any person from a public sector company or the Central Government or any State Government Any movable property, being equity shares of a public sector company or a company Such shares have been received under strategic disinvestment
5 The fund management entity of the resultant fund. Any movable property, being shares or units or interest in the resultant fund. The shares or units have been received in lieu of shares or units or interest held by the investment manager entity in the original fund, pursuant to the relocation, subject to the following conditions:– (a) not less than 90% of shares or units or interest in the fund management entity of the resultant fund are held by the same entities or persons, in the same proportion as held by them in the investment manager entity of the original fund; and (b) not less than 90% of the aggregate of shares or units or interest in the investment manager entity of the original fund was held by such entities, or persons.
(2) The provisions of section 79 shall also not apply to the transfer of any movable property of the nature mentioned in sub-rule (1) [Table: Sl. No. 2] where the conditions mentioned therein are satisfied.
(3) For the purposes of– (a) sub-rule (1) [Table: Sl.No. 1],– (i) "resident" means a person having physical possession of property on the basis of a registered sale deed or latest set of power of attorney, agreement to sale, will, possession letter and other documents including documents evidencing payment of consideration in respect of a property in unauthorised colonies and includes their legal heirs but does not include a tenant, licensee or permissive user; and (ii) "unauthorised colony" shall have the same meaning as assigned to it in clause (b) of section 2 of the National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Act, 2019 (45 of 2019); (b) sub-rule (1) [Table: Sl.No. 2],– (i) a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company; and (ii) "Tribunal" shall have the same meaning as assigned to it in section 2(90) of the Companies Act, 2013 (18 of 2013); (c) sub-rule (1) [Table: Sl.No. 3],– (i) "investor" shall have the same meaning as assigned to it in paragraph 2(1)(b) of the Scheme; (ii) "investor bank" shall have the same meaning as assigned to it in paragraph 2(1)(c) of the Scheme; (iii) "reconstructed bank" shall have the same meaning as assigned to it in paragraph 2(1)(d) of the Scheme; and (iv) "Scheme" means Yes Bank Limited Reconstruction Scheme, 2020. (d) sub-rule (1) [Table: Sl.No. 4], ―strategic disinvestment‖ shall have the same meaning as assigned to it in section 116(3)(c); and (e) sub-rule (1), [Table: Sl.No. 5]- - (i) the expressions "relocation", "original fund" and "resultant fund" shall have the meanings respectively assigned to them in section 70(2) [Table: Sl. No.5]; (ii) "fund management entity" shall have the same meaning as assigned to it in regulation 2(p) of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019); and (iii) "investment manager entity" means the fund manager of the original fund regulated by the respective regulation of the jurisdiction in which the original fund is located.

S. No	Class of persons	Nature of Asset	Conditions
1.	Resident of an unauthorised colony in the National Capital Territory of Delhi.	Any immovable property being land or building, or both.	Where the Central Government by notification, regularised the transactions of such immovable property based on the latest power of attorney, agreement to sale, will, possession letter and other documents including documents evidencing payment of consideration for conferring or recognising right of ownership or transfer or mortgage in regard to such immovable property in favour of such resident.
2.	Shareholder.	Any movable property, being unquoted shares, of a company or its subsidiary or the subsidiary of such subsidiary	(a) Where the Tribunal, on an application moved by the Central Government under section 241 of the Companies Act, 2013 (18 of 2013), has suspended the Board of Directors of such company and has appointed new directors nominated by the Central Government under section 242 of the said Act; and (b) where the share of the company or its subsidiary or the subsidiary of such subsidiary has been received by the shareholder pursuant to a resolution plan approved by the Tribunal under section 242 of the Companies Act, 2013 (18 of 2013) after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner.
3	Investor or the Investor bank	Any movable property, being equity shares, of the reconstructed bank	Where the said share has been allotted by the reconstructed bank under the Scheme at a price specified in paragraph 3(3) of the Scheme.
4	Any person from a public sector company or the Central Government or any State Government	Any movable property, being equity shares of a public sector company or a company	Such shares have been received under strategic disinvestment
5	The fund management entity of the resultant fund.	Any movable property, being shares or units or interest in the resultant fund.	The shares or units have been received in lieu of shares or units or interest held by the investment manager entity in the original fund, pursuant to the relocation, subject to the following conditions:– (a) not less than 90% of shares or units or interest in the fund management entity of the resultant fund are held by the same entities or persons, in the same proportion as held by them in the investment manager entity of the original fund; and (b) not less than 90% of the aggregate of shares or units or interest in the investment manager entity of the original fund was held by such entities, or persons.

Rule breakdown

Match the person, asset and conditions in one row

Each table row specifies the class of persons, the asset and the conditions. All parts of the relevant row must be matched; the rule is not a general exemption for all receipts connected with the named sectors.

Keep the notification, scheme, Tribunal order or relocation evidence that supports the particular exception.

Delhi unauthorised-colony property receipts

The first row concerns the defined resident and immovable property transactions regularised by Central Government notification on the stated documentary basis. The definition includes legal heirs but excludes tenants, licensees and permissive users.

Physical possession and the specified title or transaction documents matter. Do not treat every person occupying a property in an unauthorised colony as automatically within the definition.

Tribunal-approved company resolution shares

The second row requires the specified Central Government application, Tribunal suspension of the board and appointment of government-nominated directors, and receipt of the shares under a section 242 resolution plan approved after the stated tax-authority hearing opportunity.

The subsidiary definition for this row uses more than half of nominal equity-share capital. Sub-rule (2) extends the section 79 exception only to the transfer of the movable property in this second row when its conditions are satisfied.

Reconstructed-bank and strategic-disinvestment shares

The third row refers to the investor or investor bank and the equity shares allotted at the specified price under the Yes Bank Limited Reconstruction Scheme, 2020. The fourth concerns the described equity shares received under strategic disinvestment.

Use the exact Scheme definitions or statutory strategic-disinvestment definition. These are not general exceptions for any bank recapitalisation or any government-related share purchase.

Fund-relocation management-entity conditions

The fifth row addresses the resultant fund’s management entity receiving the described interests in lieu of interests held by the original fund’s investment manager entity pursuant to relocation.

At least 90% of the resultant management entity’s interests must be held by the same persons or entities in the same proportions as in the original investment manager entity, and those persons or entities must have held at least 90% of the aggregate interests in that original entity. Keep the two tests distinct and document both ownership structures.

Practical exception file and limited scope

Prepare a row-by-row file recording the parties, asset, governing notification or order, dates, ownership and consideration evidence, and satisfaction of each condition.

Confirm separately whether any other tax provision applies. In particular, do not extend the section 79 exception from the second row to all five rows merely because each is a section 92 receipt exception.

Key takeaways

Five conditional classes

Each row’s person, asset and conditions must be met.

Section 79 is narrower

Its extension is tied only to the second row.

Defined residents and schemes

Ordinary-language labels are insufficient.

Two 90% conditions

Fund-relocation ownership requires both stated tests and the proportionality condition.

Practical checklist

Select the precise row and prove every condition.
Retain the relevant notification, scheme or Tribunal order.
Reconcile both original and resultant ownership structures for the relocation row.

Avoid

Do not extend the section 79 exception to unrelated rows.
Do not treat a sector label as proof of an exception.

FAQs

Does the section 79 exception extend to all five classes?

No. Sub-rule (2) ties it to the movable property and conditions in table row 2.

Does a tenant qualify as a resident for the Delhi row?

The definition expressly excludes a tenant, licensee or permissive user.

Is any Tribunal-approved restructuring enough for row 2?

No. The row describes a specific Central Government application, board intervention, resolution plan and hearing sequence.

Is one 90% ownership test enough for the relocation row?

No. Both prescribed 90% tests apply, including the same-person and same-proportion condition in clause (a).

Glossary

Scheme: For table row 3, the Yes Bank Limited Reconstruction Scheme, 2020.
Resident: The special property-possession definition for table row 1, including legal heirs and excluding the stated occupiers.
Strategic disinvestment: The expression defined by reference to section 116(3)(c) for table row 4.

Official sources

Official notified Income-tax Rules, 2026 — Notification 22/2026