Capital gain tax rate for AY2025-26: The income tax department has issued a fresh update on the capital gains taxation structure, adjusting how different types of assets are taxed under both the new and old tax regimes.
Capital gain tax rate for AY2025-26: The revised framework, now available on the income tax department’s official website, outlines asset-specific rates and conditions for applicability
Capital gain tax rate for AY2025-26: The income tax department has issued a fresh update on the capital gains taxation structure, adjusting how different types of assets are taxed under both the new and old tax regimes.
The changes apply across both short- and long-term capital gains (STCG and LTCG), and also address incomes earned by non-residents through foreign investments.
The revised framework, now available on the department’s official website, outlines asset-specific rates and conditions for applicability.
It reads as follows: “Determination of Tax in certain special cases: Since all the incomes are not taxable at the same rate. The document provides a list of Capital Gains/Incomes arising out of certain securities eligible for special tax rates. It contains details with respect to the eligible assessee, security, or tax rates etc.”
The update affects both domestic taxpayers and foreign investors. Here's a breakdown of the newly specified categories:
A] Section 111A: Short-Term Capital Gains (STCG)
Who it applies to: All taxpayers
Assets covered: Equity shares, units of equity-oriented mutual funds, and business trusts
Tax rate: 15 per cent if transferred before July 23, 2024; 20 per cent if transferred on or after July 23, 2024
Basic exemption limit adjustment: Available for resident individuals and Hindu Undivided Families (HUFs)
Deductions under Chapter VI-A: Not permitted
Who it applies to: All taxpayers
Assets covered: Same as STCG
Tax rate: 10 per cent if the asset is sold before July 23, 2024; 12.5 per cent if sold on or after that date
Applicable only if capital gains exceed Rs 1.25 lakh
Basic exemption limit adjustment: Available for resident individuals and HUFs
Deductions under Chapter VI-A: Not allowed
Who it applies to: Non-resident individuals and foreign companies
Income covered: Royalties, technical service fees, interest, and dividends
Tax rate: 10-20 per cent depending on income type; 20 per cent for royalties and technical services
Basic exemption limit adjustment not available
Some deductions allowed under Section 80LA in International Financial Services Centres (IFSC)
Assets covered: Global Depository Receipts (GDRs); Foreign Currency Convertible Bonds (FCCBs); and Foreign Currency Exchangeable Bonds (FCEBs)
Tax rate: 10 per cent on interest and dividend income
LTCG taxed at 10 per cent before July 23, 2024, and 12.5 per cent afterward
STCG details not specified
No exemptions or deductions allowed
The revised taxation table is part of the government’s broader strategy to align tax compliance with international norms and encourage transparency in capital inflows and outflows.