TaxTMI 
TaxTMI 
Comparison of Section 197 "Tax on long-term capital gains." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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....ent beyond the reference date of acquisition (23rd July, 2024) used for transitional relief. Background & Scope Statutory hook: Clause 197 of the Income Tax Bill, 2025 (Old Version) - titled "Tax on long-term capital gains." Context: establishes the method of computing tax where total income includes income charged under the head "Capital gains" arising from transfer of long-term capital assets. Coverage: persons whose total income includes LTCG; special rules for resident individuals/HUFs and transitional relief for land/building acquired before 23 July 2024. Definitions provided for "securities," "listed securities," "unlisted securities," and "indexed cost of acquisition/improvement" by cross-reference to section 2(h) of the Securities....
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....erences. Interpretation The clause reflects an intent to segregate LTCG from other income for rate application while preserving progressive taxation principles for non-LTCG income (by taxing non-LTCG income at normal rates and LTCG at a concessional flat rate). The resident individual/HUF provision in sub-section (2) operates as a mechanism to preserve exemption threshold benefits for personal taxpayers by allowing an adjustment of LTCG to the extent necessary to retain the basic exemption. The transitional mechanism in sub-section (3) indicates a legislative intent to mitigate potential tax increases resulting from the change in rate/calculation methodology for land/building acquired before the specified date (23 July 2024), by effective....
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....; E is ignored. Numerical details and rates for other slabs are Not stated in the document. Interplay Definitions rely on cross-references: "securities" per section 2(h) of the Securities Contracts (Regulation) Act, 1956; "indexed cost" meanings per section 72. The Bill refers to Chapter VIII deductions (for computation of gross total income) but does not cite specific sections; the interplay with section 72 is invoked in the transitional relief clause. The document does not set out interactions with other specific notifications, circulars or international tax treaty provisions. Not stated in the document: whether the section supersedes earlier provisions, or how it interacts with any existing capital gains exemptions/rollovers elsewhere ....
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....mpanies for certain unlisted securities by excluding set-off provisions u/s 72(6). This alters tax incidence and computation mechanics for such taxpayers, potentially increasing taxable gains where section 72(6) would otherwise allow set-off or carry-forward treatment; it introduces a distinct regime for cross-border disposals of private-company equity. * Transitional date language: Both texts reference 23rd July, 2024 for acquisition date in the special formula addressing land/building acquired before that date. The Bill (Document 2) phrases it "which is acquired before the 23rd July, 2024," whereas the Act (Document 1) uses "which was acquired before the 23rd July, 2024." * Practical impact: Minor drafting edit with no substantive dif....
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....ed equity-oriented assets); the Act omits that explanatory sentence in the published section text. Practically, the exclusion relied on in that explanatory line is not explicit within the section's operative text in either document; reliance on such explanatory notes is limited. Practical Implications * Compliance and risk areas: Taxpayers must segregate LTCG from other income and compute tax in two limbs. Resident individuals/HUFs must monitor whether their non-LTCG income falls below the exemption threshold to avail the LTCG reduction under sub-section (2). For land/building transfers acquired before 23 July 2024, taxpayers must compute dual tax calculations (12.5% approach vs 20% with indexed cost) to quantify any excess for relie....