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Draft of Notification to be issued under section 112A(4) of the Income‑tax Act,1961

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Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 24th April, 2018


Notification under section 112A as inserted by Finance Act, 2018 – Seeking
comments of stakeholders


Finance Act, 2018 has withdrawn the exemption under clause (38) of section
10 of the Income-tax Act, 1961 (the Act) and has introduced a new section 112A in
the Act, to provide that long term capital gains arising from transfer of a long-term
capital asset being an equity share in a company or a unit of an equity oriented fund
or a unit of a business trust shall be taxed at 10 per cent of such capital gains
exceeding one lakh rupees. The said section, inter alia, provides that the provisions
of the section shall apply to the capital gains arising from a transfer of long-term
capital asset being an equity share in a company, only if securities transaction tax
(STT) has been paid on acquisition and transfer of such capital asset.

However, to provide the applicability of the tax regime under section 112A of
the Act to genuine cases where the STT could not have been paid, it has also been
provided in sub-section (4) of section 112A of the Act that the Central Government
may specify, by notification, the nature of acquisitions in respect of which the
requirement of payment of STT shall not apply in the case of acquisition of equity
share in a company.

In order to have wider consultation in this matter, the draft of notification
proposed to be issued under section 112A (4) of the Act has been uploaded on Stakeholders are requested to submit their comments/
suggestions on the draft notification by 30th April, 2018 at the e-mail address

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.



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