What is the tax treatment of capital gains in India?
Capital gains arising from the transfer of a capital asset are taxable in India under Sections 45 to 55A of the Income Tax Act, 1961. The tax rate depends on the period of holding and the nature of the asset. For long-term capital gains from equity shares/units, the tax rate is 10% (plus applicable surcharge and cess) if securities transaction tax (STT) has been paid. Short-term capital gains are taxed at normal slab rates. Note: Finance Act 2025 has introduced a new concessional tax regime for long-term capital gains from unlisted shares at 15% (plus surcharge and cess) effective from April 1, 2025. Supporting Case Law: Rajesh Goel v. CIT (2010) – Delhi High Court – ITA 534/2007 – Link: https://indiankanoon.org/doc/26426644/ – Ratio: The court upheld the taxability of capital gains under Sections 45 to 55A of the Income Tax Act. Current Status: Capital gains taxation provisions are largely settled, though disputes may arise regarding computation and valuation.
