📌 Revised Capital Gains Tax Rates & Exemptions
🔹 Short-Term Capital Gains (STCG)
- Equity shares and mutual fund units sold within 12 months will now be taxed at 20% (previously 15%).
🔹 Long-Term Capital Gains (LTCG)
- Gains on equity assets held for more than 12 months will now be taxed at 12.5% (previously 10%).
- The exemption limit for LTCG has been increased from ₹1 lakh to ₹1.25 lakh, offering additional tax relief to investors.
📌 New Taxation Framework for Charitable Trusts & Non-Profit Organizations
A major restructuring has taken place in the taxation of charitable trusts. The new law consolidates all amendments made since 1961 under Chapter XVII-B, covering:
✅ Registration procedures
✅ Tax computation
✅ Accreted tax regulations
✅ Compliance norms
📌 Capital Gains Taxation: Structural Adjustments with Retained Framework
While the fundamental structure of capital gains taxation remains unchanged, the new bill brings improvements in clarity and organization.
🔹 Key Clauses in the New Bill:
- Clause 67: Defines capital gains and their taxability based on asset transfers.
- Clause 196: Covers short-term capital gains (STCG) taxation for equity shares, mutual funds, and business trust units.
- Clause 197: Covers long-term capital gains (LTCG) for non-equity long-term capital assets.
- Clause 198: Applies LTCG taxation to equity shares, mutual funds, and business trust units.
Additionally, redundant tax-exempt clauses under Section 47 of the 1961 Act have been eliminated. This includes exemptions for industrial land transfers and stock exchange demutualization.
📌 Key Takeaways for Taxpayers & Businesses
✅ Investors: Higher STCG tax rates, but increased LTCG exemption benefits long-term investors.
✅ Businesses: Clarified tax provisions for better compliance and planning.
✅ Charitable Trusts: Consolidated regulations reduce ambiguity and simplify compliance.
📌 Conclusion
The Income Tax Bill 2025 ensures a more structured tax system while maintaining key provisions of capital gains taxation. Investors, businesses, and charitable organizations should review these updates and adjust their tax strategies accordingly.
For professional tax consultation and compliance assistance, contact Tax Logic India:
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