Section 115E → Section 127
Tax on investment income and long-term capital gains (NRIs)
Quick Answer
Section 115E of the Income Tax Act, 1961 (Tax on investment income and long-term capital gains (NRIs)) corresponds to Section 127 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 115E
Section 115E of the 1961 Act sets out the rules on tax on investment income and long-term capital gains (nris). Provides a concessional flat rate of 20% on investment income and 10% on LTCG from specified foreign exchange assets for Non-Resident Indians.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 115E is retained and renumbered as Section 127 of the Income-tax Act, 2025. Retained. Preserves the incentive structure for NRIs to invest in India using foreign currency.
The transition impact on Section 115E is assessed as High. Very commonly used by the Indian diaspora.
Sec 115E
Provision Summary
Provides a concessional flat rate of 20% on investment income and 10% on LTCG from specified foreign exchange assets for Non-Resident Indians.
Sec 127
Provision Summary
Retained. Preserves the incentive structure for NRIs to invest in India using foreign currency.
Key Changes & Highlights
- No major change. Integrated deeply with FEMA definitions.
Related Sections
Frequently Asked Questions
Which subject does Section 115E of the 1961 Act cover?
Section 115E of the Income Tax Act, 1961 covers tax on investment income and long-term capital gains (nris). Provides a concessional flat rate of 20% on investment income and 10% on LTCG from specified foreign exchange assets for Non-Resident Indians.
What is the new section number for Section 115E under the Income-tax Act, 2025?
Section 115E of the Income Tax Act, 1961 maps to Section 127 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Preserves the incentive structure for NRIs to invest in India using foreign currency.
How does the Income-tax Act, 2025 affect Section 115E in practice?
The transition impact for Section 115E is rated High. Very commonly used by the Indian diaspora.
Disclaimer: This mapping of Section 115E (Tax on investment income and long-term capital gains (NRIs)) to Section 127 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 115E is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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