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YUGEN REALTY, SURAT
Giving major relief to home buyers, the Modi government at the Center on Tuesday decided to amend the recent regime of long-term capital gains (LTCG).
According to the information, after this change, taxpayers will be allowed to choose between a lower tax of 12.5 per cent with listing (on unlisted properties) or a higher rate of 20 per cent with listing on properties acquired before July 23, 2024.
The government is mulling over this proposal in which there are also possibilities of changes and after the changes the new rules will be implemented soon.
After this amendment, the tax payers will get tax relief on the economic gains received on immovable properties. This change has been made through an amendment in Finance Bill 2024.
Actually this time in Budget 2024 Finance Minister Nirmala Sitharaman made many important tax related announcements. It took a major decision to eliminate the benefit of indexation in the real estate sector.
Along with this, the long-term capital gains tax was reduced from 20% to 12.5% in the budget. But now consideration is going on to improve it. In Budget 2024, the government announced major changes in property sale tax rules. After that, the controversy escalated.
The government reduced the LTCG tax on long-term property sales to 12.5 percent. But the indexation benefit available on it was removed.
Later, the government clarified that which properties will be subject to indexation and which properties will not?
Finance Minister Nirmala Sitharaman announced a standard long-term capital gain (LTCG) tax in her budget speech. Earlier, different LTCG rates were applicable on many financial and non-financial properties.
As such, a 10 percent tax was levied on the sale of shares held for more than one year. However, non-financial properties like real estate and gold were taxed at 20 percent on sale.
In the budget, the government reduced the Long Term Capital Gain (LTCG) tax on sale of any type of property. That means whether you sell shares or sell a property, you will have to pay long-term capital gains tax of 12.5 percent.
However, the government removed the indexation available on sale of property. The government then said that the change was made to simplify the tax system.
Indexation periodically adjusts the purchase price of a property in line with inflation over time. which is used for calculation of capital gain.
The government releases the Cost Inflation Index (CII) every year to measure the change in prices compared to a base year (2001-2002).
Indexation is determined by calculating based on that.However, the government removed the indexation available on sale of property. The government then said that the change was made to simplify the tax system.
Indexation periodically adjusts the purchase price of a property in line with inflation over time. which is used for calculation of capital gain.
The government releases the Cost Inflation Index (CII) every year to measure the change in prices compared to a base year (2001-2002). Indexation is determined by calculating based on that.
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Disclaimer : This information has been collected through secondary research and Yugen Realty Newspaper is not responsible for any errors in the same.
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