Finance Acts

Amendment of section 115ACA In section 115ACA of the Income-tax Act, in sub-section (1), in the longline, for clause (ii), the following clause shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “(ii) the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income,— (A)   at the rate of ten per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent for any transfer which takes place on or after the 23rd day of July, 2024; and”.

Amendment of section 115AC In section 115AC of the Income-tax Act, in sub-section (1), in the long line, for clause (ii), the following clause shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “(ii) the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (c), if any, included in the total income,— (A)   at the rate of ten per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent for any transfer which takes place on or after the 23rd day of July, 2024; and”.

Amendment of section 115AB In section 115AB of the Income-tax Act, in sub-section (1), in the long-line, for clause (ii), the following clause shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “(ii) the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income,— (A)   at the rate of ten per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent for any transfer which takes place on or after the 23rd day of July, 2024; and”.

Amendment of section 113 In section 113 of the Income-tax Act, with effect from the 1st day of September, 2024,— (a)   the word “undisclosed” shall be omitted; (b)   in the proviso, the words, figures and letters beginning with “and applicable” and ending with “under section 132A” shall be omitted.

Amendment of section 112A In section 112A of the Income-tax Act, in sub-section (2), for clause (i), the following shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “(i)   the amount of income-tax calculated on such long-term capital gains exceeding one lakh twenty-five thousand rupees— (a)   on long-term capital gains at the rate of ten per cent. for any transfer which takes place before the 23rd day of July, 2024; and (b)   on long-term capital gains, at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024:     Provided that the limit of one lakh twenty-five thousand rupees shall apply on aggregate of the long-term capital gains under sub-clauses (a) and (b);”.

Amendment of section 112 In section 112 of the Income-tax Act, in sub-section (1), for the clauses (a), (b), (c), (d) and the first proviso, the following shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:— “(a)   in the case of an individual or a Hindu undivided family, being a resident,— (i)   the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income; and (ii)   the amount of income-tax calculated on such long-term capital gains,— (A)   at the rate of twenty per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent for any transfer which takes place on or after the 23rd day of July, 2024:     Provided that 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, such 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):     Provided further that 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 payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and (ii)   the amount of income-tax calculated on such long-term capital gains,— (A)   at the rate of twenty per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent 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 payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and (ii)   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 twenty per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent for any transfer which takes place on or after the 23rd day of July, 2024; and (iii)   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 ten per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent 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 payable on the total income as reduced by the amount of long-term capital gains, had the total income as so reduced been its total income; and (ii)   the amount of income-tax calculated on such long-term capital gains,— (A)   at the rate of twenty per cent for any transfer which takes place before the 23rd day of July, 2024; and (B)   at the rate of twelve and one-half per cent for any transfer which takes place on or after the 23rd day of July, 2024:     Provided that where the tax payable in respect of any income arising from the transfer of a long-term capital asset which takes place before the 23rd day of July, 2024, being listed securities (other than a unit) or zero coupon bond, exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee:”.

Amendment of section 111A In section 111A of the Income-tax Act, in sub-section (1), with effect from 23rd day of July, 2024,— (a)   for the long line occurring before the first proviso, the following shall be substituted and shall be deemed to have been substituted with effect from the 23rd day of July, 2024, namely:—     “the tax payable by the assessee on the total income shall be the aggregate of— (i)   the amount of income-tax calculated on such short-term capital gains— (a)   at the rate of fifteen per cent for any transfer which takes place before the 23rd day of July, 2024; and (b)   at the rate of twenty per cent for any transfer which takes place on or after the 23rd day of July, 2024; (ii)   the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:”; (b)   in the first proviso, for the words “rate of fifteen per cent”, the words, brackets and figure “rate as applicable in clause (i)” shall be substituted and shall be deemed to have been substituted.

Amendment of section 94B In section 94B of the Income-tax Act, with effect from the 1st day of April, 2025,— (a)   in sub-section (3), after the words “banking or insurance”, the words “or a Finance Company located in any International Financial Services Centre,” shall be inserted; (b)   in sub-section (5), after clause (iii), the following clauses shall be inserted, namely:—     ‘(iv) “Finance Company” means a finance company as defined in clause (e) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Finance Company) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019) and which satisfies such conditions and carries on such activities, as may be prescribed;     (v) “International Financial Services Centre” shall have the meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).’.

Amendment of section 92CA  In section 92CA of the Income-tax Act, with effect from the 1st day of April, 2025,— (a)   in sub-section (2A),— (i)   for the words and bracket “any other international transaction [other than an international transaction]”, the words and bracket “any other international transaction or specified domestic transaction [other than an international transaction or a specified domestic transaction]” shall be substituted; (ii)   for the words “if such other international transaction is an international transaction”, the words “if such other international transaction or a specified domestic transaction is an international transaction or a specified domestic transaction” shall be substituted; (b)   in sub-section (2B),— (i)   after the words “Where in respect of an international transaction”, the words “or a specified domestic transaction” shall be inserted; (ii)   for the words “such transaction is an international transaction”, the words “such transaction is an international transaction or a specified domestic transaction” shall be substituted.

Amendment of section 80CCD In section 80CCD of the Income-tax Act, in sub-section (2), the following proviso shall be inserted with effect from the 1st day of April, 2025, namely:— ‘Provided that where the total income of the assessee is chargeable to tax under sub-section (1A) of section 115BAC, the provisions of sub-section (2) shall have effect as if for the words “ten per cent” referred to in clause (b), the words “fourteen per cent” had been substituted.’.