Income Tax--Capital Gains

An Overview of Income Tax Act, 2025 : Part 2

V.K. Subramani

In Part 1 written previously the contents of sections 1 to 66 of ITA, 2025 were highlighted. In this part, we would continue to highlight the changes with brief note.

Capital gain

-- Section 67(1) of ITA 2025 is similar to section 45(1) of ITA 1961. Any profits and gains arising from the transfer of a capital asset effected in a tax year is chargeable to tax under the head 'Capital gains' and shall be deemed to be income of the tax year in which the transfer takes place. However, it would not be applicable where the transaction is covered by sections 82 to 89 which are identical to sections 54 to 54H of the ITA 1961 providing deduction in respect of reinvestment of capital gains.

-- The capital asset is defined in section 2(22) of ITA 2025 and the word transfer is defined in section 2(109) of ITA 2025 which are similar to section 2(14) and section 2(47) of ITA 1961 respectively.