Schedule 112A – From sale of equity share in a company or unit of equity-oriented fund or unit of a business trust on which STT is paid under section 112A AY 2026-27
‘Schedule 112A’ in the Income Tax Return (ITR) forms deals with the computation of long-term capital gains (LTCG) arising from the sale of equity shares in a company, or units of an equity-oriented fund or a business trust, where Securities Transaction Tax (STT) has been paid, and which are taxable under section 112A of the Income Tax Act.
The schedule collects detailed transaction-wise information to correctly compute the taxable portion of LTCG after considering the grandfathering provisions. It starts by capturing basic details of each transaction, such as whether the shares/units were acquired before or after 31st January 2018 and before or after 23rd July 2024, the name of the share/unit, its ISIN code, the number of shares/units transferred, and the sale price per share/unit.
Then it requires the full value of consideration, depending on when the shares were acquired. For assets acquired before 31st January 2018, taxpayers must determine the cost of acquisition as per the grandfathering rules, which involves comparing the actual cost with the fair market value as on 31st January 2018 and the actual sale price to arrive at the correct taxable gain. For assets acquired after 31st January 2018, the usual cost of acquisition without indexation is entered.
The schedule also requires details like total fair market value as per section 55(2)(ac), any expenditure incurred wholly and exclusively in connection with the transfer and finally computes the total deduction and the resultant balance of long-term capital gain to be included in the computation.
In ITR-1 and ITR-4, there is no separate schedule for reporting long-term capital gains (LTCG) taxable under section 112A. Only the details of the sale consideration and cost of acquisition need to be entered, and that too only if the total LTCG does not exceed Rs. 1,25,000.
- Section 112Aof the Income-tax Act, 1961
Under Section 112A, long-term capital gains (LTCG) from equity shares, units of equity-oriented funds/ULIPs, and units of business trusts are exempt up to Rs. 1.25 lakh in a year, and any excess is taxable at 12.5% plus surcharge and cess. The benefit applies to all assessees, provided STT is paid on transfer, and in case of equity shares, also at acquisition (with certain exceptions like pre-2004 shares, FDI, ESOPs, QIBs, Government allotment, etc.).
For securities acquired on or before 31-01-2018, the cost of acquisition is determined using the grandfathering rule (higher of actual cost or lower of FMV as on 31-01-2018 and sale consideration). For those acquired on or after 01-02-2018, actual cost applies. Deductions under Sections 80C–80U, rebate under Section 87A, and computation in foreign currency are not allowed. Adjustment of the basic exemption limit is also restricted, except for resident individuals and HUFs where income is below the exemption limit.
This schedule applies to ITR-1 to ITR-7