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CMA Final · Direct Tax Laws and International Taxation · Different Aspects of Tax Planning

Under the Income-tax Act, 2025, a person responsible for maintaining books containing a record of a specified financial transaction furnishes the statement required by section 508(1). Which of the following is one of the transactions that can be a "specified financial transaction" under section 508(3), as prescribed?

Taking or accepting a loan or deposit can be a specified financial transaction. Section 508(3) lists purchase or sale of property, services, works contracts, investments or expenditure, and loans or deposits, as prescribed. The other options are not categories in that list.

  1. AA transaction of taking or accepting a loan or depositCorrect
  2. BA gift of ancestral property made by a Hindu undivided family to a member
  3. CA transfer of capital asset between a holding company and its wholly owned Indian subsidiary only
  4. DA transaction that is wholly exempt from tax in all cases

Explanation

Section 508(3) lists purchase, sale or exchange of goods or property or right or interest in property, rendering any service, works contract, investment made or expenditure incurred, and taking or accepting a loan or deposit, as may be prescribed. The other options describe categories that do not appear in that list.

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