3 Points
Joined September 2025
Teh relevant section on gransfathering clause explicitly states that equity mutual funds and bonds can not avail grandfathering , however is silent on debt oriented mutual funds. :-
https://incometaxindia.gov.in/Documents/Left%20Menu/income-from-capital-gains.htm?utm_source=chatgpt.com
* The Finance (No. 2) Act, 2024 removed the indexation benefit and introduced a uniform tax rate of 12.5% on long-term capital gains. As per the amendment, no indexation benefit is allowed while computing capital gain from long-term capital assets transferred on or after 23-07-2024. However, the Government has introduced a grandfathering provision. This provision allows resident individuals and resident HUFs to still apply indexation on land or building acquired before 23-07-2024 and pay tax at the old rate of 20% if the tax under the new law (i.e., tax calculated at 12.5% without indexation benefit) results in a higher amount.
However, there are some cases where benefit of indexation is not available, which are as under:
Section
|
Capital Asset
|
Transferor
|
Third Proviso to Section 48 |
Long-term capital gains arising from transfer of an equity share, or a unit of an equity oriented fund or a unit of a business trust as referred to in Section 112A. |
Any Person |
Fourth proviso to section 48
|
Bonds or debentures.
Note: However, indexation benefit is available on two type of bonds, namely,-
• Capital indexed bonds (issued by the Government)
• Sovereign Gold Bond (issued by the RBI under the Sovereign Gold Bond Scheme, 2015)
|
Any person
|
112
|
Capital gains arising from transfer of unlisted shares (which is taxable at concessional rate) as calculated without giving effect to first proviso to Section 48
|
Non-resident
|
50A
|
Depreciable asset (other than an asset used by a power generating unit eligible for depreciation on straight line basis)
|
Any person
|
50B
|
Undertaking/division transferred by way of slump sale as covered by section 50B
|
Any person
|
115AB
|
Units purchased in foreign currency as given in section 115AB
|
Offshore fund
|
115AC
|
Global depository receipts (GDR) purchased in foreign currency as given in section 115AC
|
Non-resident
|
115ACA
|
Global depository receipts (GDR) purchased in foreign currency as given in section 115ACA
|
Resident individual - employee
|
115AD
|
Securities as given in section 115AD
|
Foreign Institutional
Investors
|