Section 112 - Tax on Long Term Capital Gains - Income Tax - Ready Reckoner - Income Tax

Section 112 : TAX ON LONG TERM CAPITAL GAINS Where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head Capital gains , the tax payable by the assessee on the total income shall be the aggregate of,- On or After 23/07/2024 [ Amended vide Finance (No. 2) Act, 2024 ] (a) in the case of an individual or a Hindu undivided family, being a resident, (i) Adjustment of Unexhausted Basic Exemption Limit Benefit of slab rate is available on such LTCG in case of resident individual or HUF i.e. not available to non-resident ; Where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate as applicable in sub-clause (ii): and (ii) Rate of tax calculated on such long-term capital gains, (A) at the rate of 20% for any transfer which takes place before the 23rd day of July, 2024; and (B) at the rate of 12.5% for any transfer which takes place on or after the 23rd day of July, 2024: (iii) In the case of transfer of a long-term capital asset, being land or building or both, which is acquired before the 23rd day of July, 2024, - where the income-tax computed under item (B) exceeds the income-tax computed in accordance with the provisions of this Act, as they stood immediately before their amendment by the Finance (No. 2) Act, 2024, such excess shall be ignored; (b) in the case of a domestic company, (i) the amount of income-tax calculated on such long-term capital gains, - (A) at the rate of 20% for any transfer which takes place before the 23rd day of July, 2024; and - (B) at the rate of 12.5% for any transfer which takes place on or after the 23rd day of July, 2024; (c) in the case of a non-resident (not being a company) or a foreign company, (i) the amount of income-tax calculated on long-term capital gains [except where such gain arises from transfer of capital asset referred to in sub-clause (iii)], - (A) at the rate of 20% for any transfer which takes place before the 23rd day of July, 2024; and - (B) at the rate of 12.5% for any transfer which takes place on or after the 23rd day of July, 2024; and (ii) the amount of income-tax on long-term capital gains arising from the transfer of a capital asset, being unlisted securities or shares of a company not being a company in which the public are substantially interested, as computed without giving effect to the first and second provisos to section 48, calculated on such long-term capital gains, - (A) at the rate of 10% for any transfer which takes place before the 23rd day of July, 2024; and - (B) at the rate of 12.5% for any transfer which takes place on or after the 23rd day of July, 2024; (d) in any other case of a resident, (i) the amount of income-tax calculated on such long-term capital gains, - (A) at the rate of 20% for any transfer which takes place before the 23rd day of July, 2024; and - (B) at the rate of 12.5% for any transfer which takes place on or after the 23rd day of July, 2024: Before 23/07/2024 (a) In case of an individual or HUF being resident , the amount of income tax calculated on long term capital gain shall be 20%. Adjustment of Unexhausted Basic Exemption Limit Benefit of slab rate is available on such LTCG in case of resident individual or HUF i.e. not available to non-resident. (b) In case of a Domestic company , the amount of income tax calculated on long term capital gain shall be 20%. (c) In case of non-resident (not being a company) or a foreign company, tax on LTCG on unlisted securities (or shares of a company not being a company in which public are substantially interested) shall be 10% without applying first proviso and second proviso to section 48 . (i.e. Benefit of Indexation) . In respect of other long-term capital gains, the applicable rate of tax would be 20% (d) In any other case of a resident the amount of income tax calculated on long term capital gain shall be 20%. Lower rate of tax for transfer of listed securities, zero coupon bonds and Mutual Fund Unit Any LTCG arising on transfer of Listed securities (other than a unit ) or Zero coupon bond , then tax on LTCG payable by the assessee shall be lower of: 20% of LTCG with giving effect of the provisions of the second proviso to section 48 (i.e. with indexation) , of applicable; or 10% of LTCG without giving effect of the provisions of the second proviso to section 48 (i.e. without indexation). [ First Proviso to section 112(1) ] Any LTCG arising on transfer of unit of a Mutual Fund specified under clause (23D) of section 10 , during the period beginning on the 1st day of April, 2014 and ending on the 10th day of July, 2014,then tax on LTCG payable by the assessee shall be lower of: 20% of LTCG with giving benefit of the provisions of the second proviso to section 48 (i.e. with indexation) , of applicable; or 10% of LTCG without giving effect to the provisions of the second proviso to section 48 (i.e. without indexation). [ Second Proviso to section 112(1) ] In case of Non-corporate non-resident and foreign companies, Long term capital gains transfer of a capital assets, being unlisted securities or share in a company in which public are not substantially interest are eligible for a concessional rate of tax @10% (without indexation benefit). Section 112(2) Benefit of slab rate is available on such LTCG in case of resident individual or HUF. i.e. not available to non-resident. Tax on LTCG compute separately, the gross total income shall be reduced by the amount of LTCG income. Chapter VI-A deduction shall not be allowed on LTCG.