LTCG EXEMPTION AND TAX APPLICABILITY

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This discussion clarifies the tax treatment of Long Term Capital Gains (LTCG) on listed equity shares and similar investments. While previously exempt under Section 10(38), a Finance Act amendment introduced Section 112A, taxing LTCG exceeding £1 lakh at 10% from April 1, 2018. The conversation also touches upon the process of declaring these gains in tax filings and the choice between old and new tax regimes, including potential refunds for excess TDS.

jaya

jaya (Querist)

14 August 2025 hi,
as per my knowledge, income from LTCG is Exempted u/s 10(38)..so do i need to mention the LTCG amount in CG statement and in EI both? as i have mentioned in CG and it under EI but it is still showing the tax on LTCG in TTI...what should i do so that it will not calculate the Tax in TTI?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

14 August 2025 Earlier, LTCG arising from Sale of Listed Equity Shares or unit of Equity Oriented Fund or of Business Trusts, were exempt from income tax u/s 10 (38) of the Income Tax Act subject to fulfilment of prescribed conditions.
The Finance Act, 2018, has withdrawn the exemption u/s 10(38) and introduced a new section 112A in the ITA, to tax such LTCG exceeding Rs. 1 Lakh at the rate of 10%. (modified in finance act 2024 again) The amendment is effective from 01stApril, 2018 and accordingly will apply to sale of listed equity shares, unit of Equity Fund or of Business Trust on or after 01st April, 2018. It is pertinent to note that sale transactions undertaken before 01st April, 2018 were entitled to exemption u/s 10(38).

jaya

jaya (Querist)

14 August 2025 ok... and he should not mention it under CG right? suppose person got 20k as LTCG then does he need to mention it under 112A?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

14 August 2025 The declaration will be under Schedule 112A, which will get updated in Schedule CG by utility itself.

jaya

jaya (Querist)

18 August 2025 thanx...i have one more querry...if you can pls help me out on that...
suppose somebody has opted for old regime while submitting the papers to his/her office for tax calculation purpose.. that time he/she came under tax slab and subsequently company deducted 15k from the salary..now he/she is opting for new regime while filing the return ...tax applicable is getting rebate u/s 87A..my question is the 15k which company deducted should get back as refund no?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

18 August 2025 Yes, after deducting tax liability the excess amount is refunded back. & assessee is at liberty to choose any regime while filing return, irrespective of tax calculation of employer.

jaya

jaya (Querist)

18 August 2025 Thank you so much..i m filing that return but it is not showing the refund part...i dont know y...i will check with the department...thank you once again

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

18 August 2025 Also Check form 16 for verification of TDS deduction.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 September 2025 Good luck....

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