Pl explain will the Rs. 5 million limit also apply to Sec 151 A which is for capital gain on debt securities

Question

Tax is now withheld under Sec 151A at source for gain on certain debt securities. If  gain under this section exceeds Rs 5 million will it fall under Normal tax regime like it does in Sec 151 (profit on debt). Also what will be the treatment of this income,  separate block of income,  Fixed / Final tax ?

Answer 1

If the capital gain on the disposal of certain debt securities (as defined under Section 151A) exceeds Rs 5 million, it will not automatically fall under the Normal Tax Regime (NTR) in the same manner as "Profit on Debt" under Section 151/7B.

• Final/Fixed Tax: The 15% tax deducted at source under Section 151A is generally considered a final tax discharge on the capital gain for residents, unless otherwise specified.
• Separation from Profit on Debt: While profit on debt (interest) exceeding Rs 5 million becomes subject to normal slab rates, the capital gain on securities (Section 151A) is treated as a separate block of income and taxed at the specified rates (15% for filers).