Whether inclusion of LTCG taxed at 12.5% in adjusted total income under Section 115JC (AMT) nullifies the benefit of concessional capital gains rate

[Fahiyaz Ahmmed]

Under the amended LTCG regime (Finance Act, 2024), an assessee may opt to pay 12.5% LTCG without indexation (or 20% with indexation for pre-23/07/2024 properties). However, the LTCG amount is still included in total income / adjusted total income for Section 115JC (AMT) purposes. Due to this inclusion, AMT at 18.5% may become payable, effectively nullifying the benefit of the 12.5% option. This results in an indirect higher tax burden on LTCG despite a special concessional rate being provided by law. Is there any Supreme Court or High Court ruling addressing this interaction between LTCG at special rates and AMT under Section 115JC? Have courts provided any remedy or exclusion to preserve the benefit of the concessional LTCG rate? If not, are there analogous MAT/AMT judgments on capital gains that can be relied upon?

AI Summary

Concessional long-term capital gains tax vs AMT u/s 115JC: whether LTCG stays in adjusted total income, negating relief The text raises the interaction between the concessional long-term capital gains regime introduced by the Finance Act, 2024 (12.5% without indexation, or 20% with indexation for specified pre-cut-off properties) and the computation of 'adjusted total income' for alternate minimum tax under section 115JC. It notes that LTCG taxed at special rates continues to form part of total income/adjusted total income for section 115JC purposes, which can trigger AMT at 18.5% and thereby override the practical benefit of the 12.5% concessional rate. The query seeks judicial precedents (Supreme Court/High Court) granting exclusion or other relief, or analogous MAT/AMT rulings on capital gains affecting special-rate taxation outcomes.