Quick Summary
Rationalisation of taxation of capital gains on transfer of capital assets by non-residents The existing provisions of Section 115AD of the Act provide that where the total income of a specified fund or Foreign Institutional Investor includes - (a) income received in respect of securities (other than units referred to in section 115AB); or(b) income by way of short-term or long-term capital gains arising from the transfer of such securities, the income-tax on the income by way of long-term
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FAQ :
The main change is to increase the income tax rate on long-term capital gains from the transfer of securities (not covered by Section 112A) for specified funds and FIIs from 10% to 12.5%.
These amendments will affect specified funds and Foreign Institutional Investors (FIIs) who are non-residents and have capital gains from the transfer of certain securities.
These amendments will take effect from 1st April 2026, applying to the assessment year 2026-27 and subsequent assessment years.
The new tax rate for long-term capital gains on securities not referred to in section 112A will be 12.5%.
The amendment specifically addresses long-term capital gains on securities not referred to in section 112A. Gains covered by section 112A were already brought to parity with resident rates.
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