Section 112A → Section 107
Tax on long-term capital gains in certain cases (Equity Shares)
Quick Answer
Section 112A of the Income Tax Act, 1961 (Tax on long-term capital gains in certain cases (Equity Shares)) corresponds to Section 107 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 112A
Provision Summary
Taxes LTCG on listed equity shares/funds exceeding Rs. 1 Lakh at 10% (or 12.5% as per recent budgets) without indexation.
Sec 107
Provision Summary
Retained. The initial exemption limit (e.g., Rs. 1.25 Lakhs) is dynamically adjustable via the Finance Act schedules rather than requiring a core Act amendment.
Key Changes & Highlights
- Grandfathering calculation (for shares bought before Jan 31, 2018) is fully automated on the portal.
Related Sections
Related Articles from the Tax Academy
general transition
Direct Tax Code 2025: A Guide to Capital Gains & Deduction Changes
Expert analysis on the transition from the Income Tax Act 1961 to the Direct Tax Code 2025. Understand the impact on Section 80C deductions and capital gains tax.
general transition
Direct Tax Code 2025: Section 112A Gone, 12.5% Tax on Equity Gains
Expert guide on the new 12.5% tax on equity mutual funds and shares under the Direct Tax Code 2025, replacing Section 112A. Learn about the removal of the ₹1 lakh exemption.
general transition
Section 111A Tax Shock: STCG Tax Rate Jumps to 20% in 2025
Expert guide on the new 20% tax on short-term capital gains under Direct Tax Code 2025. Understand the impact on your investments and prepare for the transition.
global tech employees
Tax on Foreign Stocks (NYSE/NASDAQ) for Indians: The Definitive 2025-26 Guide
Complete tax guide for tech employees on ESOP/RSU of foreign stocks. Learn about LTCG at 20%, Schedule FA reporting, and why Section 112A does not apply.
nri taxation
NRI LTCG Tax: Guide to the New 12.5% Rule vs Section 112A
A professional guide for NRIs on the proposed shift from Section 112A's 10% LTCG tax to a new 12.5% rate under the Direct Tax Code 2025. Analyze DTAA impact and prepare.
Frequently Asked Questions
What does Section 112A of the Income Tax Act 1961 deal with?
Section 112A (Tax on long-term capital gains in certain cases (Equity Shares)) Taxes LTCG on listed equity shares/funds exceeding Rs. 1 Lakh at 10% (or 12.5% as per recent budgets) without indexation.
What is the new section number for Section 112A under the Direct Tax Code 2025?
Section 112A of the ITA 1961 maps to Section 107 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 112A under the new tax code?
Section 112A is marked as "Retained" with status "Modified". Impact: Very High - Affects all long-term retail and institutional stock market investors.
What are the key changes to Section 112A under DTC 2025?
Grandfathering calculation (for shares bought before Jan 31, 2018) is fully automated on the portal.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
Need professional help on Section 112A?
Compare trusted providers — both offer DTC 2025-ready CA services.
*Affiliate links — we may earn a small commission at no extra cost to you. Disclosure.
Want to calculate tax on this section?