COMPARISON BETWEEN SECTION 112 AND SECTION 112A OF INCOME TAX ACT

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COMPARISON BETWEEN SECTION 112 AND SECTION 112A OF INCOME TAX ACT

  1. Long term capital gains under these two sections cover:
  • Equity share in a company
  • Unit of Equity Oriented Fund
  • Unit of a business trust
  1. First proviso in both the sections relate to the benefit of slab rate in case of Individual and HUF, being resident.
  1. Deductions under Chapter-VIA are not available in both sections.
  1. Both sections have one common tax rate @ 10%.

 Difference between section 112 and section 112A:

 

 Sr. No.  Particulars Section 112 Section 112A
1. What type of LTCA covers? Applies to transfer of all Long Term Capital Assets defined as per section 2(29A) of the Act. Applies to transfer of only following Long Term Capital Assets:-

·        Equity share in a company

·        Unit of Equity Oriented Fund

·        Unit of a business trust

 

2. Condition of payment of STT Applies on transfer of LTCA whether STT is paid or not.
Applies only when following conditions are satisfied:-
LTCA                STT Paid
On Acquisition  On Transfer On Transfer
Equity share in a company     Yes     Yes
Unit of Equity Oriented Fund     No     Yes
Unit of a business trust     No     Yes
However, above conditions are not applicable if transfer covers under sub-section (3) or (4).
3. Tax Rate Tax Rate @ 20% or 10% Tax Rate only @ 10% in excess of Rs. 1 lakh.
4. Exemption of Rs. 1 lakh NO YES
5. Applicability Inserted by Finance Act, 1992 Inserted by Finance Act, 2018. Applicable w.e.f. 01-04-2019
6. Relief u/s 87A YES No
7. Indexation benefit as per 2nd proviso to Section 48 YES No
8. Mode of Computation of Capital Gain in foreign currency in case of NR (1st proviso to Section 48 YES NO

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