India: Capital Gains Tax

India’s Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) were designed as tax-efficient ways to invest in income-producing assets through a regulated, transparent structure. That promise remains, but three successive legislative reforms between 2023 and 2026 have changed the tax structure for these business trusts and their investors.

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) in T. Srikanth v. DCIT [ITA No. 3792/Chny/2025] has unequivocally held that the deeming fiction created u/s 50C of the Income-tax Act, 1961 (‘the Act’), which substitutes stamp duty value as the "full value of consideration" for computing capital gains u/s 48, cannot be imported into section 54F to reduce the quantum of exemption available to a taxpayer who has reinvested the entire actual sale consideration in a new residential house.

Employee stock options are designed to attract, incentivise, and retain talent. That is how they are presented to the board and described in offer letters. But the moment a company enters an M&A transaction, an arrangement built by the HR function becomes a term the deal lawyers have to price, and it is very often the last term anyone looks at.

India’s General Anti-Avoidance Rule (“GAAR”) framework has long rested on a critical assurance to investors: investments made prior to 1 April 2017 would remain outside the scope of GAAR scrutiny. For nearly a decade, this grandfathering protection was widely understood to extend to gains realised on the eventual transfer of such investments, irrespective of when the exit occurred.

The Chennai Bench of Income Tax Appellate Tribunal, in the case of Sundaram Alternative Opp Series High Yield Secured Debt Fund rejected the tax officer’s attempt to re-characterise the Fund's investment income as business income and affirmed the tax exemption for the Fund.

On 5 June 2026, the Government of India promulgated the Income-tax (Amendment) Ordinance, 2026, exempting specified foreign investors from taxation on both interest income and capital gains arising from investments in Government Securities (“G-Secs”), with retrospective effect from 1 April 2026.

We are pleased to present the latest edition of Tax Street – our newsletter that covers all the key developments and updates in the realm of taxation in India and across the globe for the month of January 2026.

The Union Minister for Finance and Corporate Affairs presented the Finance Bill, 2026 by Bill No. 3 of 2026 ("Union Budget") in the Parliament on 01.02.2026.

The assessee, a private limited company incorporated in Mauritius, acts as an investment holding company by investing in securities of Indian companies...