Section 67

Under Section 67 of the Income Tax Act 2025 for Tax Year 2026-27: For listed equity shares and equity-oriented mutual funds — Long-Term Capital Gains (held > 12 months): 12.5% on gains above ₹1,25,000 per year (gains up to ₹1.25 lakh are NIL); Short-Term Capital Gains (held ≤ 12 months): 20%. The STCG rate was increased from 15% to 20% in Budget 2024 and is now embedded in ITA 2025. No indexation benefit for equity assets.

Under Section 67 of the Income Tax Act 2025, for sale of house property held more than 24 months (LTCG), taxpayers have two options: (1) 12.5% tax WITHOUT indexation; or (2) 20% tax WITH Cost Inflation Index (CII) indexation on the cost of acquisition. The option that results in lower tax can be chosen. For properties purchased many years ago (high inflation adjustment), the 20% + indexation route often results in lower tax. STCG (property held ≤ 24 months) is added to income and taxed at slab rates.

Yes — under Section 67 of the Income Tax Act 2025, long-term capital gains from listed equity shares and equity-oriented mutual funds are exempt up to ₹1,25,000 per financial year. This exemption threshold was increased from ₹1 lakh to ₹1.25 lakh in Budget 2024 and is embedded in ITA 2025. Only gains above ₹1,25,000 are taxed at 12.5%. This exemption applies to the total LTCG from all equity and equity MF transactions in a year — not per transaction.

Debt mutual funds purchased AFTER 1 April 2023 are taxed as Short-Term Capital Gains at slab rates regardless of holding period — there is no long-term capital gains benefit. This means even if you hold a debt MF for 5 years, the gains are added to your income and taxed at your applicable slab rate (20%, 30%, etc.). Debt MFs purchased BEFORE 1 April 2023 are grandfathered — LTCG with indexation at 20% applies if held more than 36 months. This Budget 2023 change is now embedded in Section 67 of ITA 2025.

For immovable property (house, land, commercial property), the holding period for Long-Term Capital Gains under Section 67 of the Income Tax Act 2025 is MORE than 24 months (2 years). If you sell a property within 24 months of purchase, the gain is Short-Term Capital Gain (STCG) — taxed at your slab rate. If sold after 24 months — LTCG, taxed at 12.5% (without indexation) or 20% (with indexation), at your option.

For listed equity shares under ITA 2025: Short-Term Capital Gains (STCG) arise when shares are sold within 12 months of purchase. STCG is taxed at 20% (flat rate under Section 67 — increased from 15% in Budget 2024). Long-Term Capital Gains (LTCG) arise when shares are held for more than 12 months. LTCG is taxed at 12.5% on gains exceeding ₹1,25,000 per year. Both rates apply only when Securities Transaction Tax (STT) has been paid on the sale. Without STT, gains are taxed differently.

You can save tax on Long-Term Capital Gains from property sale under the following reinvestment exemptions: (1) Section 83 (equivalent to Section 54) — reinvest in a new residential house within 2 years (purchase) or 3 years (construction); exemption capped at ₹10 crore; (2) Section 84 (Section 54F equivalent) — if selling any asset and reinvesting full sale proceeds in a house; (3) Section 85 (Section 54EC equivalent) — invest up to ₹50 lakh in NHAI/REC bonds within 6 months; 5-year lock-in applies. Additionally, for LTCG on property, indexation can significantly reduce the taxable gain.

Yes — capital gains are taxable regardless of whether you choose the new or old tax regime. Capital gains are taxed at SPECIAL RATES under Section 67 (12.5% LTCG, 20% STCG for equity) — these special rates apply outside the regular slab structure. However, the regime choice significantly impacts the Section 156 rebate: if your capital gains push total income above ₹12 lakh, the zero-tax rebate (available in new regime) is lost. For example: ₹10 lakh regular income + ₹3 lakh LTCG = ₹13 lakh total → rebate not available. Taxpayers with significant capital gains must plan carefully.

Under Section 69 / Section 67 of the Income Tax Act 2025 (reflecting Budget 2024 changes), when a company buys back its shares, the proceeds received by the shareholder are now taxed as CAPITAL GAINS in the shareholder's hands — not as dividend. The capital gain = buyback price − original cost of shares. If held > 12 months (listed): LTCG at 12.5%; STCG at 20%. Previously, companies paid a 20% buyback tax and shareholders received proceeds tax-free. The switchover to shareholder-level capital gains taxation is a significant change from FY 2024-25, embedded in ITA 2025.

Under Section 67 read with the surcharge provisions of ITA 2025: For LTCG and STCG on listed equity shares / equity MFs (where STT is paid) — surcharge is CAPPED at 15% (even for income above ₹2 crore or ₹5 crore). For capital gains on OTHER assets (property, unlisted shares, debt MFs) — normal surcharge applies: 10% (above ₹50L), 15% (above ₹1Cr), 25% (above ₹2Cr and ₹5Cr — capped at 25%). The 15% cap on equity capital gains surcharge is a significant relief for high-net-worth investors in equity.

Sovereign Gold Bonds (SGBs) have a special tax treatment under ITA 2025: (1) Capital gains on redemption at RBI maturity (8-year term) are COMPLETELY EXEMPT — no capital gains tax; (2) Premature redemption (after 5 years via RBI): also exempt; (3) Transfer on stock exchange before maturity: listed bond rates apply — LTCG at 12.5% (if held >12 months); STCG at slab rates. The interest of 2.5% per year paid by RBI on SGBs is fully TAXABLE as income from other sources at slab rates. This makes SGB an attractive gold investment vehicle — no tax on appreciation if held to maturity.

Under Section 107 of the Income Tax Act 2025 (equivalent to Sections 70–74 of ITA 1961): STCG losses can be set off against BOTH STCG and LTCG income. LTCG losses can ONLY be set off against LTCG — not against STCG or other income. Capital losses CANNOT be set off against salary, business income, or other heads. Unabsorbed capital losses can be CARRIED FORWARD for 8 assessment years and set off against future capital gains only. ITR must be filed before due date to be eligible for carry forward.

For unlisted shares under Section 67 of the Income Tax Act 2025: Long-Term Capital Gains (held > 24 months): 12.5% WITHOUT indexation. Short-Term Capital Gains (held ≤ 24 months): added to income and taxed at slab rates. This is a change from ITA 1961 where unlisted shares LTCG was taxed at 20% WITH indexation — now the same 12.5% no-indexation rate as listed equity applies. For startup founders and private equity investors selling shares after 2 years, this is a significant change reducing the LTCG rate.

Under Section 67 of the Income Tax Act 2025, for assets received as GIFT or INHERITANCE: Cost of Acquisition (COA) = cost at which the PREVIOUS OWNER acquired the asset (i.e., the cost is inherited). Period of holding also carries forward from previous owner. This means if your father bought shares in 2010 for ₹5 lakh and gifted them to you in 2023, and you sell them in 2026: your COA = ₹5 lakh (father's purchase price); holding period starts from 2010. If gain > ₹1.25 lakh and held > 12 months: 12.5% LTCG. The gift itself is not taxable (transfer by way of gift = not a transfer for capital gains under Section 70).

The ₹1,25,000 LTCG exemption under Section 67 of the Income Tax Act 2025 is an ANNUAL AGGREGATE exemption — not per transaction. All your LTCG from listed equity shares and equity-oriented mutual funds in a Tax Year are POOLED first. If the total LTCG is ₹1,25,000 or less: NO tax. If total LTCG > ₹1,25,000: only the excess above ₹1,25,000 is taxed at 12.5%. Example: LTCG of ₹50,000 from shares + ₹1,00,000 from equity MF = total LTCG ₹1,50,000 → taxable LTCG = ₹25,000 → tax = ₹3,125 + cess.