Section 112A → Section 198

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

Section 112A of the old Income-tax Act, 1961 · new section 198 under the Income-tax Act, 2025

New reference Section 198

Income-tax Act, 1961Section 112A

LTCG on STT-paid equity shares, equity-oriented funds and business trust units
12.5% on gains above ₹1.25 lakh (for transfers on or after 23 July 2024)
Grandfathering of cost as on 31 January 2018
No indexation; Chapter VI-A deductions not allowed against these gains

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

Income-tax Act, 2025Section 198

Same provision, now section 198
12.5% on gains exceeding ₹1,25,000 (198(2))
Rebate under section 156 not available against this tax (198(7))
Definition of 'equity oriented fund' (65% / 90% fund-of-funds tests) sits in 198(8)

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

What changed

Renumbered. Rate, the ₹1.25 lakh exemption and STT conditions are unchanged.

Practice notes

The 31 January 2018 grandfathering of cost now sits in section 90(7) and (8) (old 55(2)(ac)), not in section 198 itself.
Sale of listed shares in FY 2025-26 is still reported under 112A in the AY 2026-27 return.

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 shares under the new Income Tax Act 2025?

12.5% on long-term capital gains from listed equity shares and equity mutual funds exceeding ₹1,25,000 in a year, under section 198.

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

Section 112A of the Income-tax Act, 1961 corresponds to Section 198 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

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

Renumbered. Rate, the ₹1.25 lakh exemption and STT conditions are unchanged.

Is section 112A still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 112A of the 1961 Act. Section 198 of the 2025 Act applies from tax year 2026-27.

Related sections

111A→196Tax on short-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.)87A→156Rebate of income-tax for resident individuals with lower income