Launch offer — 25% off with code LAUNCH-25 See plans →
Microlesson · 5-min read

Incomes Taxable at Special Rates (irrespective of Regime)

# Incomes Taxable at Special Rates (Irrespective of Regime)

Certain incomes are taxed at fixed special rates that do not change whether the assessee is under the Default Tax Regime (DTR, s.115BAC) or the Optional/Old Tax Regime (OTR). These are income-specific rates applied separately to the relevant income component.

## Key Principles

  • Special rates are the same for all persons — individuals, HUFs, companies, firms, societies, etc.
  • For Resident Individuals & HUFs, any un-utilised Basic Exemption Limit (BEL) can be set off — first against STCG u/s 111A, then against LTCG u/s 112 / 112A.
  • No such BEL set-off is allowed against income under 115BB, 115BBJ, 115BBE.

## Special Rate Table

SectionIncome CategoryRate
112LTCG on land/building/both by resident Ind/HUF, acquired before 23.7.2024Lower of 20% with indexation or 12.5% without indexation
112LTCG on any other capital asset12.5% without indexation
112LTCG on unlisted securities/shares of CHCs by non-residents12.5% without indexation + foreign currency fluctuation benefit
112ALTCG on equity shares / equity-oriented funds / business trust units (STT paid)12.5% on LTCG exceeding ₹1.25 lakh
111ASTCG on equity shares / equity-oriented funds / business trust units (STT paid)20%
115BBWinnings from lotteries, crossword puzzles, horse races, card games, gambling, betting30%
115BBJNet winnings from online games30%
115BBEUnexplained income/expenditure (s.68, 69, 69A, etc.)60%

## Rebate u/s 87A Restrictions

  • OTR: Rebate u/s 87A is NOT available on LTCG u/s 112A.
  • DTR: Rebate u/s 87A is NOT available on any special income.

Worked example

### Example 1

Utilising unused BEL against special income (Resident Individual, DTR): Mr. A (age 45) has only STCG u/s 111A of ₹3,00,000 and no other income. BEL under DTR is ₹4,00,000. Since other income is nil, the entire BEL is unused. The unused BEL (₹4,00,000) is first set off against the STCG u/s 111A (₹3,00,000), reducing taxable STCG to NIL. Tax payable = NIL.

### Example 2

Choosing the lower rate u/s 112 (resident, asset acquired before 23.7.2024): Mr. B sells land (acquired Jan 2020) on 1.5.2024. Indexed cost gives LTCG of ₹10,00,000; without indexation LTCG is ₹14,00,000. Option 1: 20% × ₹10,00,000 = ₹2,00,000. Option 2: 12.5% × ₹14,00,000 = ₹1,75,000. Tax u/s 112 = lower = ₹1,75,000.

⚠️ Common exam mistakes

  • Setting off unused BEL against winnings (115BB), online games (115BBJ) or unexplained income (115BBE) — not allowed; BEL only adjusts against 111A then 112/112A.
  • Setting off the unused BEL against LTCG 112/112A BEFORE STCG 111A — the order is 111A first, then 112/112A.
  • Claiming s.87A rebate on LTCG u/s 112A under OTR, or on any special income under DTR.
  • Applying the 12.5%-without-indexation option to non-residents' or non-resident-style assets when the assessee is actually a resident individual eligible for the lower-of comparison.
Reference: 112, 112A, 111A, 115BB, 115BBJ, 115BBE
Now that you've read this — what's next?
Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.
Start 15-min diagnostic