Section 111A → Section 196

Tax on short-term capital gains from listed equity shares, equity mutual funds and business trust units (STT paid)

Section 111A of the old Income-tax Act, 1961 · new section 196 under the Income-tax Act, 2025

New reference Section 196

Income-tax Act, 1961Section 111A

STCG on STT-paid equity shares, equity-oriented fund units and business trust units
Rate 20% for transfers on or after 23 July 2024
Shortfall in basic exemption can be adjusted for resident individuals/HUFs
Chapter VI-A deductions not allowed against these gains

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 196

Same provision, now section 196
Rate 20%
Basic exemption shortfall adjustment retained (196(2))
Chapter VIII deductions (old VI-A) not allowed against these gains (196(4))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered with simpler drafting. Rate and conditions unchanged.

Practice notes

The STT condition does not apply to transactions on an IFSC stock exchange settled in foreign currency.
'Equity oriented fund' is defined in section 198.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the STCG tax rate on shares under the new Income Tax Act 2025?

20% on short-term capital gains from STT-paid listed equity shares, equity mutual fund units and business trust units, under section 196.

What is section 111A called in the new Income-tax Act, 2025?

Section 111A of the Income-tax Act, 1961 corresponds to Section 196 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 111A under the new Income Tax Act?

Renumbered with simpler drafting. Rate and conditions unchanged.

Is section 111A still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 111A of the 1961 Act. Section 196 of the 2025 Act applies from tax year 2026-27.

Related sections

112A→198Tax on long-term capital gains from listed equity shares, equity mutual funds and business trust units (STT paid)112→197Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)54F→86Exemption on long-term capital gain from any asset other than a residential house, when net consideration is invested in a residential house