Section 112 → Section 106
Tax on long-term capital gains
Quick Answer
Section 112 of the Income Tax Act, 1961 (Tax on long-term capital gains) corresponds to Section 106 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 112
The starting point is Section 112 of the Income Tax Act, 1961 — tax on long-term capital gains. Taxes standard Long-Term Capital Gains (LTCG) on assets like real estate, unlisted shares, and gold at 20% with indexation (or 12.5% without indexation).
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 112 is retained and renumbered as Section 106 of the Income-tax Act, 2025. Rates and indexation benefits restructured and simplified. The base LTCG rate for physical assets is standardized to reduce disputes.
The transition impact on Section 112 is assessed as Critical. The foundational section for real estate and startup exit taxation.
Sec 112
Provision Summary
Taxes standard Long-Term Capital Gains (LTCG) on assets like real estate, unlisted shares, and gold at 20% with indexation (or 12.5% without indexation).
Sec 106
Provision Summary
Rates and indexation benefits restructured and simplified. The base LTCG rate for physical assets is standardized to reduce disputes.
Key Changes & Highlights
- Unlisted share taxation for non-residents heavily streamlined to attract Foreign Direct Investment (FDI).
Related Sections
Related Articles from the Tax Academy
general transition
Income-tax Act, 2025: A Guide to Capital Gains & Deduction Changes
Expert analysis on the transition from the Income Tax Act 1961 to the Income-tax Act, 2025. Understand the impact on Section 80C deductions and capital gains tax.
global tech employees
Income-tax Act, 2025: 12.5% LTCG for Unlisted Foreign Securities Explained
Understand the new Income-tax Act, 2025 amendments impacting global tech employees. Learn about the proposed 12.5% LTCG rule for unlisted foreign securities and compliance.
nri taxation
NRI LTCG Tax: Guide to 1961 Act vs. Income-tax Act, 2025 Changes
Expert analysis of the new Income-tax Act, 2025 for NRIs. Understand the shift from LTCG with indexation to a new flat tax regime and its impact on your real estate investments.
Frequently Asked Questions
Which subject does Section 112 of the 1961 Act cover?
Section 112 of the Income Tax Act, 1961 covers tax on long-term capital gains. Taxes standard Long-Term Capital Gains (LTCG) on assets like real estate, unlisted shares, and gold at 20% with indexation (or 12.5% without indexation).
What is the new section number for Section 112 under the Income-tax Act, 2025?
Section 112 of the Income Tax Act, 1961 maps to Section 106 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Rates and indexation benefits restructured and simplified. The base LTCG rate for physical assets is standardized to reduce disputes.
How does the Income-tax Act, 2025 affect Section 112 in practice?
The transition impact for Section 112 is rated Critical. The foundational section for real estate and startup exit taxation.
What is new about Section 112 under the Income-tax Act, 2025?
Unlisted share taxation for non-residents heavily streamlined to attract Foreign Direct Investment (FDI). These points are specific to Section 112 (Tax on long-term capital gains).
Disclaimer: This mapping of Section 112 (Tax on long-term capital gains) to Section 106 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 112 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
Need professional help on Section 112?
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?