The Statutory Brief

IT Act 1961 → 2025 / Section 112

Capital gains

Section 112 → Section 197

Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)

Section 112 of the old Income-tax Act, 1961 · new section 197 under the Income-tax Act, 2025

New reference Section 197

Income-tax Act, 1961Section 112

  • 12.5% without indexation for transfers on or after 23 July 2024
  • Resident individuals/HUFs selling land or building bought before 23 July 2024 can choose 20% with indexation if lower
  • Basic exemption shortfall adjustment for residents

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

Income-tax Act, 2025Section 197

  • Same provision, now section 197
  • Rate 12.5% (197(1)(b))
  • Land/building acquired before 23 July 2024 by resident individual/HUF: excess over 20%-with-indexation tax ignored (197(3) formula)
  • Non-residents' unlisted securities computed without the foreign-currency conversion rule of section 72(6) (197(4))

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

What changed

Renumbered and the indexation option is expressed as a formula (E = A – B). The effect is the same as under section 112.

Practice notes

  • Exemptions under sections 82 (old 54) and 86 (old 54F) reduce the gain before this rate applies.
  • For property sales, also check the stamp duty value rule in section 78 (old 50C).

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 LTCG tax rate on property under the new Income Tax Act 2025?

12.5% without indexation under section 197. For land or building bought before 23 July 2024, resident individuals and HUFs pay the lower of that and 20% with indexation.

What is section 112 called in the new Income-tax Act, 2025?

Section 112 of the Income-tax Act, 1961 corresponds to Section 197 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 112 under the new Income Tax Act?

Renumbered and the indexation option is expressed as a formula (E = A – B). The effect is the same as under section 112.

Is section 112 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 112 of the 1961 Act. Section 197 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)54→82Exemption on long-term capital gain from sale of a residential house reinvested in another residential house50C→78Stamp duty value as sale consideration for land or building