Capital Gains arising out of Sale of Long-Term Capital Assets shall be Taxable at Rate of 20% u/s 112 of Income Tax Act: ITAT

The Income Tax Appellate Tribunal (ITAT) has ruled that capital gains arising from the sale of long-term capital assets shall be taxable at the rate of 20% under Section 112 of the Income Tax Act. The case involved a taxpayer who had sold long-term capital assets and claimed a lower tax rate on the gains. The Assessing Officer had applied the 20% tax rate, leading to a dispute. The ITAT upheld the Assessing Officer’s decision, stating that the provisions of Section 112 clearly mandate a 20% tax rate on long-term capital gains. This ruling provides clarity on the taxation of long-term capital gains and ensures uniform application of the tax rate. Taxpayers are advised to consider this ruling while calculating their tax liabilities on the sale of long-term capital assets to avoid disputes with tax authorities.