The Statutory Brief

IT Act 1961 → 2025 / Section 48

Capital gains

Section 48 → Section 72

How capital gains are computed: sale value less transfer expenses and cost

Section 48 of the old Income-tax Act, 1961 · new section 72 under the Income-tax Act, 2025

New reference Section 72 (cost: 55 → 90)

Income-tax Act, 1961Section 48

  • Full value of consideration minus transfer expenses, cost of acquisition and improvement
  • Indexation only where the grandfathered 20% option applies
  • STT and interest claimed elsewhere not deductible

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

Income-tax Act, 2025Section 72 (cost: 55 → 90)

  • Same formula, now section 72
  • Indexed cost used only for item B of the section 197(3) formula
  • No deduction for STT or interest already claimed under section 22 or Chapter VIII (72(3))
  • Cost of acquisition definitions in section 90 (old 55)

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

What changed

Renumbered; indexation is now referenced through the land/building option in section 197.

Practice notes

  • Stamp duty value substitution (old 50C) is in section 78.
  • Fair market value as on 1 April 2001 option for older assets continues in section 90.

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

How is capital gain computed under the new Income Tax Act 2025?

Section 72: sale consideration less transfer expenses and cost of acquisition/improvement; STT and already-claimed interest are not deductible.

What is section 48 called in the new Income-tax Act, 2025?

Section 48 of the Income-tax Act, 1961 corresponds to Section 72 (cost: 55 → 90) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 48 under the new Income Tax Act?

Renumbered; indexation is now referenced through the land/building option in section 197.

Is section 48 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 48 of the 1961 Act. Section 72 (cost: 55 → 90) of the 2025 Act applies from tax year 2026-27.

Related sections

45→67Charge of capital gains: when a transfer gives rise to taxable gains112→197Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)50C→78Stamp duty value as sale consideration for land or building