Computation of capital gains - old section 114 and new section 80T - Income Tax - 578/CBDT

INSTRUCTION NO. 578/CBDT Dated : July 30, 1973 Section(s) Referred: 114 ,80T Statute: Income - Tax Act, 1961 Attention is invited to para 26(vi) of the Comptroller and Auditor General's report for the year 1971-72 wherein the Income-tax officer, while computing the capital gains for the assessment year 1968-69 had wrongly applied for the concessional rates applicable to the assessment year 1967-68 without taking note of the change brought about by Finance Act, 1968 with effect from 1st April, 1968 in the scheme of levy of capital gains itself. 2. Section 114 of the Income-tax Act, 1961 relating to capital gains ceased to be operative with effect from 1st April, 1968 as it was replaced by a new Section 80T vide Finance Act, 1968. Whereas, in the case of capital gains, relief in the form of rebate at the average rate of income-tax used to be calculated and allowed upto the assessment year 1967-68. Section 80T introduced by Finance Act, 1968 has provided for relief by way of straight deductions from the capital gains. Capital gains as reduced by deduction under Section 80T is now to be included in the total income. 3. The Board desires, that besides bringing the above instructions to the notice of all the officers working in your Charge a review of cases completed for the assessment year 1968-69 involving computation of capital gains should also be undertaken and a compliance report indicating the number of mistakes detected and remedial actions taken thereon should be submitted positively by 20th August, 1973 as this matter will come up before the Public Accounts Committee for discussion.