Section 112(1) — the law in short
What the courts have decided on section 112(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Cairn UK Holdings Ltd v DIT
High CourtHelps taxpayerValidity unconfirmed
I am a non-resident selling listed shares of an Indian company off market, and I have already used the foreign currency computation under the first proviso to section 48 — can I still pay tax at ten per cent under the proviso to section 112(1)?
Yes. The Delhi High Court held on 7 October 2013 that the proviso to section 112(1) applies on its own terms to long-term capital gains on listed securities, units and zero coupon bonds computed without indexation. Nothing in it requires the assessee to have been entitled to the second proviso to section 48, and nothing excludes an assessee who has taken the currency-fluctuation benefit under the first proviso. The two provisos to section 48 serve different purposes — exchange rate neutralisation and inflation neutralisation — and are not interchangeable. The Authority for Advance Rulings' contrary ruling was quashed and the ten per cent rate allowed.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.