The document provides an overview of the special tax provisions for specified incomes and securities under Sections 111A, 112A, 115A, 115AB, 115AC, and 115AD of the Income-tax Act, 1961. It identifies the eligible assessees, covered securities, applicable tax rates on dividend, interest, royalty, fees for technical services, short-term capital gains (STCG), and long-term capital gains (LTCG), as well as the availability of deductions and basic exemption benefits. The provisions apply to resident and non-resident taxpayers, foreign companies, overseas financial organisations, Foreign Portfolio Investors (FPIs), specified funds, and other eligible assessees, depending on the nature of the income or security. The document covers equity shares, units of equity-oriented mutual funds, units of business trusts, foreign currency convertible bonds (FCCBs), foreign currency exchangeable bonds (FCEBs), Global Depository Receipts (GDRs), and mutual fund units purchased in foreign currency. It specifies that LTCG under Sections 112A, 115AC and specified cases under Section 115AD is taxable at 12.5% on gains exceeding ₹1.25 lakh, while other specified incomes are subject to the prescribed rates under the respective provisions. It also explains the restrictions on deductions under Chapter VI-A and the availability of basic exemption limits, reflecting the provisions of the Income-tax Act, 1961, as amended by the Finance Act, 2026.
Determination of Tax in certain special cases
Since all the incomes are not taxable at a same rate. The document provides a list of Capital Gains/Incomes arising out of certain securities eligible for special tax rates. It contains details with respect to the eligible assessee, security, or tax rates etc.
Particulars |
Section 111A |
Section 112A |
Section 115A |
Section 115AB |
Section 115AC |
Section 115AD |
Eligible Assessee |
Any Assessee |
Any Assessee |
Non-Resident and Foreign Company |
Overseas financial organization (Offshore Fund) |
Non-Resident |
Foreign Portfolio Investor and Specified Funds |
Securities covered |
|
|
– |
Units of a mutual fund purchased in foreign currency. |
|
All securities other than units covered under Section 115AB. Specified securities include:Equity sharesUnits of equity-oriented mutual fundUnits of business trust |
Tax Rate on Income from covered securities |
– |
– |
|
10% |
10% on Interest Income10% on Dividend Income |
5% / 20% – FPI10% – Specified Funds |
Tax rate on long-term capital gains |
– |
Note: The tax shall be calculated on capital gains exceeding Rs. 1.25 lakh. |
– |
• 12.5% |
• 12.5% |
12.5% on long-term capital gains referred to in section 112ANote: The tax shall be calculated on capital gains exceeding Rs. 1.25 lakh.
|
Tax rate on short-term capital gains |
• 20% |
– |
– |
– |
– |
20% on short-term capital gains referred to in section 111A
|
Admissibility of deduction under Chapter VI-A |
No |
No |
No, except under Section 80LA to a unit in IFSC and from royalty, and fees for technical services |
No |
No |
No |
Adjustment of basic exemption limit |
Available to resident individuals and resident HUF only |
Available to resident individuals and resident HUF only |
No |
No |
No |
No |
Disclaimer: The contents of this document are for information purposes only. This aims to enable public to have a quick and an easy access to information and do not purport to be legal documents. Viewers are advised to verify the content from Government Acts/Rules/Notifications etc.
“This document contains the provisions of the Income-tax Act, 1961, as amended by the Finance Act, 2026.”
[As amended by Finance Act, 2026]
(Republished with amendments)
