Heads of Income — Salaries
PY 2024–25 / AY 2025–26 ✓
⏮ Before 23-07-2024
Std Deduction u/s 16(ia)
₹50,000
NPS u/s 80CCD(2) (new regime)
10% of Salary + DA
Sec 115BAC status
Default since AY 2024–25
Gratuity / Leave / Perqs
Unchanged
⏭ After 23-07-2024 (New Budget)
Std Deduction u/s 16(ia)
₹75,000 ↑
NPS u/s 80CCD(2) (new regime)
14% of Salary + DA ↑
Sec 115BAC status
Still default · Revised slabs
Gratuity / Leave / Perqs
No change ✓
📝 Student Note
Practical impact for PY 2024–25: Under new regime (default), salaried employees get an extra ₹25,000 deduction → lower taxable salary.
80CCD(2) increase (10% → 14%) benefits employer-contributed NPS, which is allowed even in the new regime.
- Std deduction of ₹75,000 is available under both old and new regime.
- Exam tip: When 115BAC is asked, always show computation under both regimes and choose the one with lower tax.
- NPS 80CCD(2) = only employer contribution; student contribution still goes to 80CCD(1B) if opted.
Capital Gains — Major Rationalisation
Date-specific! Check transfer date
① Holding Period for LTCG
⏮ Before 23-07-2024
Listed securities
12 months
Gold / Unlisted shares / Debt
36 months
Immovable property
24 months
⏭ On/After 23-07-2024
Listed securities
12 months no change
All other assets (gold, unlisted, debt, immovable property)
24 months ↓ (simplified)
② Tax Rate Changes
| Asset Type | Gain Type | Rate Before | Rate After 23-07-24 | Section | Exemption Limit |
|---|---|---|---|---|---|
| Listed equity shares / Equity-oriented MF / Business trust units | STCG | 15% | 20% | u/s 111A | — |
| Listed equity shares / Equity-oriented MF / Business trust units | LTCG | 10% | 12.5% | u/s 112A | ₹1,25,000 (was ₹1,00,000) |
| All other assets (gold, unlisted shares, debt, immovable property, etc.) | LTCG | 20% with indexation | 12.5% without indexation | u/s 112 | — |
| Land / Building — Resident Individual or HUF only Asset acquired before 23-07-24, transferred on/after 23-07-24 |
LTCG | 20% with indexation |
GRANDFATHERING 20% with indexation OR 12.5% without indexation → Pick whichever gives lower tax |
u/s 112 | — |
③ Indexation Rule
⏮ Before 23-07-2024
Indexation on non-equity LTCG
Allowed (rate was 20%)
⏭ On/After 23-07-2024
Indexation generally
WITHDRAWN ✗
Exception — Old land/building (Resident Indiv/HUF)
Grandfathering option available (see table above)
Bonus / Right shares computation
Same concept — but no indexation for post-23-07 transfers
④ Exemptions u/s 54 / 54B / 54EC / 54F
Status after 23-07-2024:
✓ All exemptions continue unchanged. Roll-over benefits still available.
⚠️ Important: The capital gain must be computed using new rules (new rates, no indexation) before applying the exemption. The exemption calculation itself is unchanged.
⑤ Exam Decision Flow — Step-by-Step
1
Date of transfer?
On or before 22-07-2024 → Apply old rules (indexation allowed, old rates: STCG 15%, LTCG 10%, other LTCG 20% with index).
On or after 23-07-2024 → Apply new rules (steps below).
On or before 22-07-2024 → Apply old rules (indexation allowed, old rates: STCG 15%, LTCG 10%, other LTCG 20% with index).
On or after 23-07-2024 → Apply new rules (steps below).
2
Classify the asset:
Listed equity / Equity MF / Business trust unit → Path A |
Immovable property (land/building) → Path B |
All other assets → Path C
3
Determine STCG or LTCG:
Path A (listed equity etc.) → LTCG if held > 12 months.
Path B & C (all other assets) → LTCG if held > 24 months.
Path B & C (all other assets) → LTCG if held > 24 months.
4
Apply the rate:
Path A STCG = 20% · Path A LTCG = 12.5% (exempt first ₹1,25,000 u/s 112A).
Path C LTCG = 12.5% (no indexation).
Path B (old land/building, resident indiv/HUF) LTCG = lower of 20% with index OR 12.5% without index.
Path A STCG = 20% · Path A LTCG = 12.5% (exempt first ₹1,25,000 u/s 112A).
Path C LTCG = 12.5% (no indexation).
Path B (old land/building, resident indiv/HUF) LTCG = lower of 20% with index OR 12.5% without index.
5
Check exemptions: Apply 54 / 54B / 54EC / 54F if applicable. Exemptions are fully available — just ensure the gain is computed under new rules first.
📝 Student Note
Very high exam weightage. For any CG sum in PY 2024–25, the date of transfer is your first checkpoint.
- Transfers on/before 22-07-2024 → old rules, indexation available.
- Transfers on/after 23-07-2024 → new rules: no indexation, new rates, new holding periods.
- Exemptions 54 / 54B / 54EC / 54F are fully usable in both scenarios.
- Grandfathering for land/building is available only for resident individuals or HUF — not for companies or firms.
Areas with No Amendment — Computation Unchanged
Safe to use old notes
Basic concepts & definitions
Residential status
Exempt incomes
Agricultural income
Income from House Property
Other Sources (as per syllabus)
PGBP — Secs 30, 31, 32, 35, 35D
PGBP — Sec 36(1)(b)(ii)(iii)(iv)(vii)
PGBP — Sec 37(1), 37(2B)
PGBP — Sec 40A(2), 40A(3), 43B
Gratuity, leave encashment, pension
Perquisites & profits in lieu