CHAPTER XII — DETERMINATION OF TAX IN CERTAIN SPECIAL CASES
Case Laws & Commentary
SECTION 114 — TAX ON CAPITAL GAINS IN CASES OF ASSESSEES OTHER THAN COMPANIES [OMITTED]
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
A. STATUS OF THE SECTION
Section 114 stands OMITTED. The bare-Act omission note reads, verbatim: '[Omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 and reintroduced with material modifications in section 80T. Section 114 was substituted first by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962 and later on amended by the Finance Act, 1964, w.e.f. 1-4-1964, the Finance Act, 1965, w.e.f. 1-4-1965, the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965 and the Finance Act, 1966, w.e.f. 1-4-1966.]'
Original marginal heading (verbatim): 'Tax on capital gains in cases of assessees other than companies.'
B. ORIGINAL SUBJECT, HISTORY & MIGRATION
B.1 What the section did
Section 114, as it stood until 31 March 1968, prescribed the manner of taxing capital gains in the hands of assessees other than companies. It provided a measure of relief in computing the tax on long-term capital gains (through a deduction of a specified portion of such gains and a concessional treatment of the balance), reflecting the policy that capital gains, being non-recurring, should not bear the full slab burden applicable to ordinary income.
B.2 Insertion and amendment trail
Section 114 was substituted by the Finance (No. 2) Act, 1962 (w.e.f. 1-4-1962) and successively amended by the Finance Act, 1964, the Finance Act, 1965, the Finance (No. 2) Act, 1965 and the Finance Act, 1966, before being omitted by the Finance (No. 2) Act, 1967 with effect from 1 April 1968.
B.3 Where the subject-matter went
The relief mechanism for non-corporate capital gains was reintroduced, with material modifications, in section 80T (deduction in respect of long-term capital gains for assessees other than companies) within Chapter VI-A. Section 80T was itself later omitted (Finance Act, 1987, w.e.f. 1-4-1988) as the capital-gains computation and rate scheme was rationalised. The modern law on the rate of tax on capital gains for non-corporate assessees is contained in sections 112 and 112A of this Chapter, read with the computation provisions in sections 45 to 55.
C. FINANCE ACT, 2026 - IMPACT NOTE
Section 114 remains omitted; the Finance Act, 2026 does not revive it. The live law on the taxation of long-term capital gains for non-corporate assessees is sections 112 and 112A (see the dedicated files in this Chapter).
D. CASE LAW - CROSS-REFERENCE TO THE SUCCESSOR PROVISIONS
No useful body of case law subsists under the omitted section 114 itself. The relevant authorities are those governing the successor provisions - the capital-gains rate sections 112 and 112A and the foundational computation principle. They are listed here as cross-references, clearly identified as authorities on the successor law and not on the repealed section 114.
Held: The charging and computation provisions of the capital-gains code form an integrated whole; if the computation machinery cannot apply, the charge fails.
Relevance: The foundational authority for any capital-gains computation, now applied under sections 45-48 and the rate sections 112/112A that succeeded section 114.
Cairn UK Holdings Ltd. v. DIT (2013) 359 ITR 268 (Delhi) (cross-reference - section 112 lower-rate proviso).
Held: The lower-rate proviso to section 112(1) is available to a non-resident; eligibility for indexation is not a condition for the 10% rate.
Relevance: Illustrates the modern rate treatment of non-corporate/non-resident capital gains under the successor section 112; see the dedicated section 112 file.
Candid note: No case law is cited under the number 'section 114' itself, because the provision has been off the statute book since 1 April 1968. The authorities above are expressly cross-references to the successor provisions (sections 112/112A) and are not passed off as decisions on the omitted section.
E. SOURCES & CITATIONS
Omission and history verified against the Income-tax Act, 1961 (Bare Act, as amended by the Finance Act, 2025), Chapter XII section 114 (omission note reproduced verbatim above). Successor-provision authorities verified against publicly reported sources: CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC); Cairn UK Holdings Ltd. v. DIT (2013) 359 ITR 268 (Delhi). FA 2026 status confirmed against the firm's amendment tracker (no revival).
Caveat: Treatise-style commentary for practitioners and academic use; not legal opinion. Section 114 is omitted law retained for completeness of the Chapter; for live capital-gains taxation refer to sections 112 and 112A.
Case Laws & Commentary
SECTION 114 — TAX ON CAPITAL GAINS IN CASES OF ASSESSEES OTHER THAN COMPANIES [OMITTED]
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
A. STATUS OF THE SECTION
Section 114 stands OMITTED. The bare-Act omission note reads, verbatim: '[Omitted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968 and reintroduced with material modifications in section 80T. Section 114 was substituted first by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962 and later on amended by the Finance Act, 1964, w.e.f. 1-4-1964, the Finance Act, 1965, w.e.f. 1-4-1965, the Finance (No. 2) Act, 1965, w.e.f. 11-9-1965 and the Finance Act, 1966, w.e.f. 1-4-1966.]'
Original marginal heading (verbatim): 'Tax on capital gains in cases of assessees other than companies.'
B. ORIGINAL SUBJECT, HISTORY & MIGRATION
B.1 What the section did
Section 114, as it stood until 31 March 1968, prescribed the manner of taxing capital gains in the hands of assessees other than companies. It provided a measure of relief in computing the tax on long-term capital gains (through a deduction of a specified portion of such gains and a concessional treatment of the balance), reflecting the policy that capital gains, being non-recurring, should not bear the full slab burden applicable to ordinary income.
B.2 Insertion and amendment trail
Section 114 was substituted by the Finance (No. 2) Act, 1962 (w.e.f. 1-4-1962) and successively amended by the Finance Act, 1964, the Finance Act, 1965, the Finance (No. 2) Act, 1965 and the Finance Act, 1966, before being omitted by the Finance (No. 2) Act, 1967 with effect from 1 April 1968.
B.3 Where the subject-matter went
The relief mechanism for non-corporate capital gains was reintroduced, with material modifications, in section 80T (deduction in respect of long-term capital gains for assessees other than companies) within Chapter VI-A. Section 80T was itself later omitted (Finance Act, 1987, w.e.f. 1-4-1988) as the capital-gains computation and rate scheme was rationalised. The modern law on the rate of tax on capital gains for non-corporate assessees is contained in sections 112 and 112A of this Chapter, read with the computation provisions in sections 45 to 55.
C. FINANCE ACT, 2026 - IMPACT NOTE
Section 114 remains omitted; the Finance Act, 2026 does not revive it. The live law on the taxation of long-term capital gains for non-corporate assessees is sections 112 and 112A (see the dedicated files in this Chapter).
D. CASE LAW - CROSS-REFERENCE TO THE SUCCESSOR PROVISIONS
No useful body of case law subsists under the omitted section 114 itself. The relevant authorities are those governing the successor provisions - the capital-gains rate sections 112 and 112A and the foundational computation principle. They are listed here as cross-references, clearly identified as authorities on the successor law and not on the repealed section 114.
CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC) (cross-reference - capital-gains machinery).
Held: The charging and computation provisions of the capital-gains code form an integrated whole; if the computation machinery cannot apply, the charge fails.
Relevance: The foundational authority for any capital-gains computation, now applied under sections 45-48 and the rate sections 112/112A that succeeded section 114.
Cairn UK Holdings Ltd. v. DIT (2013) 359 ITR 268 (Delhi) (cross-reference - section 112 lower-rate proviso).
Held: The lower-rate proviso to section 112(1) is available to a non-resident; eligibility for indexation is not a condition for the 10% rate.
Relevance: Illustrates the modern rate treatment of non-corporate/non-resident capital gains under the successor section 112; see the dedicated section 112 file.
Candid note: No case law is cited under the number 'section 114' itself, because the provision has been off the statute book since 1 April 1968. The authorities above are expressly cross-references to the successor provisions (sections 112/112A) and are not passed off as decisions on the omitted section.
E. SOURCES & CITATIONS
Omission and history verified against the Income-tax Act, 1961 (Bare Act, as amended by the Finance Act, 2025), Chapter XII section 114 (omission note reproduced verbatim above). Successor-provision authorities verified against publicly reported sources: CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC); Cairn UK Holdings Ltd. v. DIT (2013) 359 ITR 268 (Delhi). FA 2026 status confirmed against the firm's amendment tracker (no revival).
Caveat: Treatise-style commentary for practitioners and academic use; not legal opinion. Section 114 is omitted law retained for completeness of the Chapter; for live capital-gains taxation refer to sections 112 and 112A.