Revised Capital Gains Taxation Rules Ready Reckoner for FY 2025-2026

A reader has pointed out an error in the Capital Gains Ready Reckoner regarding the indexation of listed and unlisted bonds/debentures. According to the 4th Proviso under Section 48, indexation is not available for debentures/bonds.

Abdul says, “In your Freefincal capital gains tax ready reckoner, there is an error regarding the Indexation on the Listed & Unlisted bonds/debentures. As per the 4th Proviso under Section 48, Indexation is not available for debentures/bonds. This would only effect a small portion of sales between 1st April 2024 to 22nd July 2024 for FY 2024-25”.

Tax expert Manmohan Sethumadhavan has kindly provided a revised Capital Gains Taxation Rules Ready Reckoner for FY 2025-2026, incorporating the following changes.

The SGB & ZCB will continue to be in 20%! or 10%, whichever is lower category.

In the Ready Reckoner, this is applicable to :

Listed Bonds, SGB, ZCB
Unlisted Bond/ Debenture

There is no doubt with regards to these instruments sold on or after 23-07-2024. All these are applicable for LTCG for those sold before.

2nd proviso to section 48 provides for indexation for transfers before 23-07-2024.

4th proviso to section 48 says that such indexation is not available for bonds or debentures other than:

Capital Indexed Bonds issued by the Government; or
Sovereign Gold Bond issued by the Reserve Bank of India.

Therefore, indexation is still applicable to Capital Indexed Bonds and SGBs.

🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥

Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.

👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈

1st proviso to section 112 allows to ignore anything in excess of 10% of gains calcuated without indexation, in case of listed bonds and ZCB. As SGB is listed, this is applicable to them.

So, the following changes are being made:

SGB : Sec.48 pro.2 & Sec.112 pro.1 applicable. LTCG tax @ 20% with indexation or 10%. No change. Old Sl.No.15. New Sl.No.15.
ZCB : Indexation not applicable. Sec.112 pro.1 (10%) applicable. Thus either 20% without indexation or 10% without indexation. So LTCG tax @ 10%. Old Sl.No.15. New Sl.No.16.
Other Listed Bonds : Indexation not applicable due to Sec.48 pro.4. Sec.112 pro.1 (10%) applicable. Thus either 20% without indexation or 10% without indexation. So LTCG tax @ 10%. Old Sl.No.15. New Sl.No.16.
Unlisted Bonds : Sec.48 pro.2 applicable and hence indexation not available. Sec.112 pro.1 (10%) not applicable being unlisted. Hence LTCG tax @ 20% without indexation. Old Sl.No.21. New Sl.No.23.

The ready reckoned is presented below as images. Click on them to zoom in. PDF download link is given below.