Section 10(38)
Exemption on Long-Term Capital Gains (Equity)
Quick Answer
Section 10(38) (Exemption on Long-Term Capital Gains (Equity)) has been deleted under the Income-tax Act, 2025, effective 1st April 2026.
What changed for Section 10(38)
The starting point is Section 10(38) of the Income Tax Act, 1961 — exemption on long-term capital gains (equity). LTCG on listed equity shares or equity-oriented mutual funds (where STT was paid) was fully exempt from tax.
Under the Income-tax Act, 2025 (effective 1st April 2026), this provision has been deleted — there is no successor section carrying it forward. NA. Deleted. Such gains are now taxable under Section 112A at 10% (or 12.5%).
The transition impact on Section 10(38) is assessed as Critical. Historical marker of when the stock market became taxable again for long-term investors.
Sec 10(38)
Provision Summary
LTCG on listed equity shares or equity-oriented mutual funds (where STT was paid) was fully exempt from tax.
Deleted
Provision Summary
NA. Deleted. Such gains are now taxable under Section 112A at 10% (or 12.5%).
Key Changes & Highlights
- Introduction of Section 112A made this massive exemption obsolete.
Related Sections
Frequently Asked Questions
Which subject does Section 10(38) of the 1961 Act cover?
Section 10(38) of the Income Tax Act, 1961 covers exemption on long-term capital gains (equity). LTCG on listed equity shares or equity-oriented mutual funds (where STT was paid) was fully exempt from tax.
Is Section 10(38) of the ITA 1961 still applicable under the Income-tax Act, 2025?
Section 10(38) has been deleted under the Income-tax Act, 2025, with no successor section carrying it forward from 1st April 2026. NA. Deleted. Such gains are now taxable under Section 112A at 10% (or 12.5%).
How does the Income-tax Act, 2025 affect Section 10(38) in practice?
The transition impact for Section 10(38) is rated Critical. Historical marker of when the stock market became taxable again for long-term investors.
What is new about Section 10(38) under the Income-tax Act, 2025?
Introduction of Section 112A made this massive exemption obsolete. These points are specific to Section 10(38) (Exemption on Long-Term Capital Gains (Equity)).
Disclaimer: This mapping of Section 10(38) (Exemption on Long-Term Capital Gains (Equity)) under the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 10(38) is currently marked Deleted, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
Need professional help on Section 10(38)?
Compare trusted providers — both offer CA services ready for the Income-tax Act, 2025.
*Affiliate links — we may earn a small commission at no extra cost to you. Disclosure.
Want to calculate tax on this section?