Comparison of Section 72 "Mode of computation of capital gains" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....provision affects taxpayers disposing of capital assets, non-resident investors in Indian securities, business trust unit-holders and specified entities. Effective/commencement date: Not stated in the document. Statutory Provision Mode Text & Scope Clause 72 (Mode of computation of capital gains) prescribes the manner in which income chargeable under the head "Capital gains" is to be computed. It applies to transfers of capital assets and sets out the deductions allowable from the "full value of the consideration" received or accruing as a result of such transfer. The text is structured in eight sub-sections addressing allowable deductions, indexation in prescribed cases, non-allowable deductions, treatment in relation to business trust ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tes a special cost-adjustment rule for unit holders receiving non-income amounts from business trusts (Schedule V items). Such amounts are to be reduced from the cost of acquisition; if the transfer is not treated as transfer under s.70 and cost determined under s.73, amounts received before and after such transaction shall be reduced from cost of acquisition. * Sub-s.72(5) allows a specified entity (as per s.67(10)) to claim a prescribed deduction attributable to the transfer of a capital asset - entitlement language is present (the entity "is entitled"). * Sub-s.72(6)-(7) impose special computation rules for non-residents dealing in shares/debentures and rupee-denominated bonds - conversion into the same foreign currency used at acqui....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the implementing rules, notification references, or cross-statutory amendments required for coherent interplay. Comparative Differences and Practical Impact Documents compared: Section 72 of the Income-tax Act, 2025 (Document 1) and Clause 72 of the Income Tax Bill, 2025 (Old Version) (Document 2). * Placement and Drafting Context: Document 1 is presented as Section 72 of the enacted Income-tax Act, 2025; Document 2 is the old version of Clause 72 in the Income Tax Bill, 2025. * Practical impact: the Act text (Document 1) represents final statutory language; the Bill text (Document 2) is an earlier proposal and may differ in specific drafting and operative details. * Sub-section (2) - Trigger for Indexation: Document 1 (Act) state....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ns under sub-section (1), shall also be entitled to a deduction calculated in such manner, as may be prescribed..." Document 2 (Bill) s.72(5) reads: "the specified entity is entitled to a deduction calculated in such manner, as prescribed..." * Practical impact: the Act text explicitly states the deduction is "in addition to deductions under sub-section (1)", which clarifies aggregation of deductions; the Bill language is less explicit on aggregation. The Act's clarification reduces interpretive ambiguity concerning whether the prescribed deduction is separate from subsection (1) deductions. * Sub-section (6) & (7) - Wording on Non-residents and Rupee-denominated bonds: Both texts substantially align, though Document 1 uses slightly....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... above. Practical Implications * Compliance and risk areas grounded in the text: taxpayers must maintain contemporaneous records of acquisition cost and cost of improvements, and of expenditures wholly and exclusively incurred for the transfer. For non-residents, records showing the foreign currency initially used for acquisition are essential to apply the conversion rule in s.72(6). * Record-keeping/evidence: the text implies the need for documentary evidence of expenditures on transfer, invoices for improvements, receipts of distributions from business trusts (to adjust cost of acquisition), and documentation of initial purchase currency for foreign purchasers. Not stated in the document: retention periods or prescribed formats for s....