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TMI BlogMode of computation of capital gains: Clause 72 of the Income Tax Bill, 2025 vs. Section 48 of the Income-tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital gains. This provision is pivotal in determining the tax liabilities arising from capital gains, ensuring that taxpayers have a clear framework for calculating their obligations. The clause is instrumental in modernizing and possibly refining the tax computation process as compared to the existing Section 48 of the Income-tax Act, 1961. This article aims to dissect Clause 72, compare it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of acquisition or improvement of the asset. However, Clause 72 introduces nuanced language and additional considerations to address modern-day financial complexities. 2. Indexed Cost of Acquisition and Improvement Both Clause 72(2) and Section 48 provide for the use of indexed cost of acquisition and improvement. However, Clause 72 specifies the use of the "Cost Inflation Index" which is updated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andling complex financial instruments and transactions. 5. Provisions for Non-Residents Clause 72(6) and (7) address the computation of capital gains for non-residents, particularly concerning foreign currency transactions and rupee appreciation. These provisions are more detailed compared to Section 48, offering a structured approach to handling foreign investments and currency fluctuations. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 48 serve the same fundamental purpose, the former introduces several enhancements to address contemporary economic challenges. The inclusion of updated inflation indices, detailed rules for non-residents, and specific provisions for business trusts reflect a more comprehensive approach to capital gains taxation. These changes could potentially lead to more efficient tax administration and re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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